Income Tax Italy IRPEF

I was just advising some clients about income tax on the rental income for thier italian property and thought you may wish to know the personal income tax rates in italy, locally know as IRPEF

There is no tax free income. The following is for income raised during the financial year 2009 upto 31/12/09. In Italy the tax year is the same as the calender year.Tax returns on the Mod 1 due 31.5.10.

First 15,000 euros taxed at 23%

Further income from 15000 – 28000 taxed at 27%

Further income from 28000 – 55,000 taxed at 38%

Further income from 55000 – 75000 taxed at 41%

Anything above 75000 taxed at 43%

So an income in Italy  of 100,000 euros would result in an italian tax bill of

15000@23%=3450

28000-15000=13000@27%=3510

55000-28000=27000@38%=10260

75000-55000=20000@41%=8200

100000-75000=25000@43%=10750

For a total tax bill of 3450+3510+10260+8200+10750=36170

Thats 36.1% italy income tax IRPEF on a 100,000 italian income…How does that rate to your countries income tax rate…post comments to let us know.

For those of you who have already bought your property in Italy and actively renting your italian holiday home please observe the approaching financial deadline on 30/09/08 for your online tax return Modello Unico 2008, for declared income from 2007, that is, if you haven’t already submitted it.

Any queries regarding IRPEF ? have a read at:

http://www.studiolegalemetta.it/PDF/IncomeTax2008.pdf

David

www.mipc.co.uk

A lot of people rent out their properties in italy and turn a blind eye to the italian tax system. This is not advised. A good accountant without charging too much will file all necessary documents to stay within the law.

I would advise you to read the following document in english to get an understanding of IRPEF. Should you have any further questions then please just ask and i will try to answer your questions.

http://www.studiolegalemetta.it/PDF/IncomeTax2008.pdf

David