{"id":947,"date":"2018-12-11T23:39:14","date_gmt":"2018-12-11T23:39:14","guid":{"rendered":"http:\/\/159.65.127.138\/?p=947"},"modified":"2026-03-30T17:26:04","modified_gmt":"2026-03-30T15:26:04","slug":"italy-tax-guide","status":"publish","type":"post","link":"https:\/\/taxing.it\/it\/italy-tax-guide\/","title":{"rendered":"Italy Tax Guide"},"content":{"rendered":"
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Overview<\/h2>

This is a very general guide and only intended to give some basic background information. It should not be seen as a substitute for specific advice.\u00a0 It focusses on the taxation of individuals and does not deal in any detail with the taxation of income from business activities (see here for more information<\/a>).<\/p>

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Tax residence<\/h2>

Impact of tax residence<\/h3>

Individuals who are tax resident in Italy<\/a> for any tax (calendar) year are subject to Italian income taxes on their worldwide\u00a0 income received in the whole of that year.\u00a0 They are also liable to report all foreign assets (e.g. real estate, investments, pensions, banks accounts, and valuables) held at any time during the course of the year.<\/p>

Non-resident individuals are liable to income taxes only on certain income and gains from Italian sources.<\/a> The Italian Tax Code contains a precise definition of Italian source income, including income from Italian real estate, income from employment of self employment where the relevant services are performed from Italian soil, so it is important to check that definition and not simply make assumptions – e.g just because you work for a foreign company or have foreign\u00a0 clients does not necessarily exclude a liability to Italian tax if you are working from Italian soil.<\/p>

Non residents are not liable to report foreign assets or pay wealth tax on them. A non resident may be liable to equivalent property ownership taxes for assets located in Italy.<\/p>

Definition of Italian Tax Residence<\/h3>

Art 2 of the Tax Code in its current, post 2023 version, provides that you are considered tax resident in Italy if, for the greater part of the tax year (more than 183 days or 184 in a leap year), you:<\/p>

  1. are physically present on Italian territory; OR<\/li>
  2. have your centre of vital interests \u2013 defined as the centre of your affections \u2013 spouse, close family \u2013 in Italy, OR<\/li>
  3. have your habitual abode in Italy; OR<\/li>
  4. are registered as resident in the list of resident population (Anagrafe<\/a>) maintained by your local authority (Comune) \u2013 this is a presumption of tax residence, not an absolute test and can be overcome, if the facts and circumstances allow, e.g. by the terms of an applicable tax treaty.<\/li><\/ol>

    All In – All Out Test<\/h3>

    This means that you will be a tax resident of Italy for any Italian tax (calendar) year,\u00a0 if you meet any one of the above tests for more than 183 days (184 in a leap year).\u00a0 If you do not meet any of the tests, you are not an Italian tax resident for that year – it is an \u201call-in all-out\u201d test.\u00a0 If you are tax resident in Italy for a particular Italian tax (calendar) year then you are liable to tax on worldwide income (possibly subject to the terms of a double tax treaty (see below) on all income received from 1 January of the relevant year, and to Italian wealth taxes on assets held from 1 January of the year onward.<\/p>

    In general, the \u201cclock resets\u201d at the end of each tax year.\u00a0 So if you arrive in Italy on 30 July of one year, and leave on 30 June of the following year, such that you do not meet test 1 \u2013 physical presence you will not be considered as tax resident for the whole of both of the relevant years, as long as you do not meet any of the other tests of tax residence for either of the two years.\u00a0 Even if you do meet the physical presence test for either of the two years, the issues of centre of vital interests,\u00a0 habitual abode and registration as resident are still in play. In other words, even if you are physically present outside Italy for an extended period, it is still possible to meet the Italian test of tax residence by virtue of your centre of family interests, habitual abode or maintaining your registration as resident with the Anagrafe<\/a>.<\/p>

    See this post for more information on the Italian Statutory Test of Tax Residence.<\/a><\/p>

    A day under the test of tax residence includes any fraction of a day during the tax year \u2013 so days of arrival and days of departure count as a whole day.\u00a0 The days do not need to be consecutive in the tax year.<\/p>

    The tests are alternative so meeting any of them will make you tax resident in Italy (or presumed to be tax resident in the case of test no. 4) for a particular tax year)<\/p>

    Some of Italy’s DTA’s<\/a> contain special rules on tax residence which may override the above rules. In particular Italy’s with Germany and the Swiss Federation contain rules permitting a split year concept. If applicable these Treaties can operate to make you tax resident from the date of transfer to Italy or make you no longer tax resident on the date of departure, by way of exception from the “All in-All out” rule.\u00a0 \u00a0In general Italy’s DTA’s will only apply to secure a more favorable treatment for the taxpayer compared to the treatment under domestic rules.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

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    Italian Tax For Non Residents<\/h2>

    Liability on Italian Source Income Only<\/h3>

    An individual who is not tax residen<\/a>t in Italy (under the definition in the Italian Tax Code) will, in general, be liable to Italian income tax only on their Italian source income<\/a>, but only where no final<\/strong> withholding tax<\/a> is made on payment by an Italian tax resident on payment of the relevant income.<\/p>

    Non residents are not liable to report foreign assets and pay wealth taxes<\/a> on them.<\/p>

    This article<\/a> contains more information on the technical definition in the Italian Tax Code of Italian source income.<\/p>

    Personal Deductions<\/a> and Standard Tax Credits<\/a> are generally not available to non tax residents, although exceptions exist.<\/p>

    Withholding Tax<\/h3>

    For the non-resident, most Italian tax liabilities will be satisfied by a way of withholding tax<\/a> on the Italian source income. The payer (e.g. bank, employer, publisher) will deduct from any payment of income the tax due, according to Italian withholding rules. On the whole this is a final, definitive tax, so that no return is required to be completed.\u00a0 The applicable rate of tax depends on a series of factors, principally the type of income and\u00a0 whether a double tax treaty reduces (or even\u00a0 exempts) the withholding tax applied at Italian statutory rates.<\/p>

    However receipt of the following type of income, by way of the most common examples, may require a non resident to file an Italian tax return:<\/p>