Italy

EXPATRIATE AND EMPLOYER TAX COMPLIANCE AND ADVISORY
Tax rate Individual income tax: progressive from 23% to 43%; income from 15.000 euro
Tax period calendar year.
Tax residency / Domicile according to domestic law For income tax purpose, an individual is deemed to be a resident if he/she is registered at the Italian Civil Registry or is domiciled in Italy under the Italian Civil Code for more than 183 days in a year.
Tax registration Expatriate is obliged to obtain fiscal code in  the event of tax liability.
Employment income definition Resident individuals are taxed on their worldwide income; nonresidents are taxed only on Italian-source income. Individuals in Italy are subject to taxation on income from employment, business inome, income from capital and land and other income. Wages and salaries paid by an employer, including occasional remuneration paid by any person, are subject to a witholding tax that represents an advance payment for income tax and that is witheld at the ordinary progressive rates.
Examples of tax exemption Payments for social welfare, accident insurance, medical insurance and the reimbursement of business expenses upon presentation of the original receipts are exempt from taxation.
Specific expatriate concession Outbound expat. can be taxed, under certain condition in according to specifi tax regime instead of the basis of salary received.
Income of board members In general terms board members remuneration is assimilated to emplyeee compensation.
Tax returns There are two kind of tax returns models: the first one (730 model) can be used by employees that qualify as Italian tax residents for two consecutive years. Generally, it is used from the individuals who have only employment income and credits and/or deductions to be claimed The filing deadline is 23 July following the end of the tax year.
The second one (Model Income return,) include employment income, tax withheld, capital gains (Form RT), foreign income/assets (Form RW), etc.. The filing deadline is 31 October of the current year for the previous year. Anybody paid from a non Italian payroll or who holds non- Italian investments and bank accounts directly has to to file this return.
Tax payments If payroll is processed, taxes are withheld  through the paysplip on montly basis .Otherwise employee is obliged to file tax return and pay taxes autonomously within the end of June of the successive fiscal year.Moreover payments of accounts are due within end of June and end of November of every fiscal year.
Tax on real estate property                                        Property owners, whther or not  resident in Italy, are liable for property tax (IMU) on buildings and land owned in Italy as investments. This tax is not applied if the real estate is used as a primary abode by the owner. The basic tax rate is 0.76% if the taxable value of the property, but the competent municipality can provide for an increase or reduction of up to 0.3% on the basic rate. The property tax on buildings and land also applied to buildings and land located abroad, if owned by an Italian tax resident. The IMU is the primary elemnt of the IUC, which also includes two other municipal services taxes. The first is known as TASI (tax for services) applied, in principle, on real estate used as a primary abode by the owners. The second is TARI (tax on refuse).
TAX TREATIES
Employment income / income from board members art 15/16 Model OECD Tax treaties.
INTERNATIONAL SOCIAL SECURITY
Cross border employments Unless otherwise provided under a relevant social security agreement or in EU Regulation No. 883/2004, individuals working in Italy generally are subject to social security contribuitions, at a rate depending on the sector and on the job title of the employee.
Exception under Art 16 of Reg. 883/2004
and Art 17 of Reg. 1408/71
generally applicable
Social Security Cost as % from gross salary and absolute amounts The Employee portion of social security for the state pension fund generally is equal to 9.19% of earning, capped at EUR 100,324 for employees who started to contribute to the mandatory state pension fund on or after 1.1.1996. For employees who commenced their contribuitions before 1.1.1996, the income is not capped and the contribuitions are calculeted on total income. In both cases, an additional 1% contribuition is payble on earnings exceeding EUR 46,123. the employer social security  rate is around 28%-30% on earnings, capped at EUR 100,324.
IMMIGRATION
Work permit All the steps are in chronological order as follow :1.Application of  work permit,2. Collection of work permit (at the competent  Italian authorities which can be different on the base of the type of Work Visa); 3.Application of  Visa; 4.Collection of Visa (at the Italian Embassy in your home country or where you are resident (after receiving your Work Permit); 5.Meeting in order to sign  the Staying and the Integration Agreement (at the Italian Authority in Italy, only in some cases of Visa); 6.Application of Residence Permit – Permit to stay  (at the Post Office ); 7.Interview and Fingerprinting ; 8.Collection of  Residence permit -Permit to stay  (at the competent local police station ‘Immigration Office’).
Visa Swiss, EU and EEA nationals do not need a visa to enter into Italy. Non EU, EEA nationals need a visa. The applications have to be lodged like descripted above.
Residency permits / registration certificate EU and EEA nationals do not need a visa to enter into Italy.
Non EU nationals in general need to apply for a residency permit. Different residency permits exist. The procedure is explicated at point “working permit”.
Driving license Driving licences issued in other EU, EEA countries are recognized in Italy.
STOCK OPTION PLAN Article. 51, paragraph 2, lett. g) of the T.U.I.R. provides that “the value of the shares offered to employees in an amount not exceeding € 2,065.83 does not contribute to the formation of employee income” on the condition that they are not repurchased by the issuing company or by the employer or otherwise sold before at least three years have passed since the perception.
ARTICLE 15 OF THE OECD MODEL
From 2017 – is possible to propose tax breaks for productivity bonuses and to convert the bonus into SPP (Share Purchase Plane).
183 days generally applicable
Notion of employer It is generally adopted the economic employer approach, especially where coherent with another Country’s position
Existence of a permanent establishment generally applicable
Alessandro Mocarelli
Partner
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