Italy » Taxes

Income Tax	VAT	Gitf Tax	Municipal Tax

Net Worth Tax

There is no net worth tax.

Municipal Tax on Immovable Property (ICI)

Tax on real estate in Italy is known as ICI. It has to be paid if you own a property in Italy whether you are a resident or non-resident. The tax is charged according to the value of the property as assessed by the authorities concerned. The amount depends on the size, location etc and if it is considered uninhabitable by the authorities the tax is reduced. Rates of property tax in Italy are usually around 0.4% to 0.7%. The tax must be paid on time to avoid any surcharge on late payments.

Sales Tax

Sales tax on property in Italy is at times included in the purchase price. VAT may be payable on new properties. It is 9% for non-luxury property and 19% for luxury property.

Inheritance Tax

Inheritance tax was reintroduced in Italy from 2007. The tax depends on the value of the asset inherited.
The tax rates also depends on the heir’s relationship to the deceased and can vary from 4%-8% of the asset value.

Rental Income Tax

Non-residents earning an income by renting out property in Italy are supposed to pay taxes on their rental income. The rent of the property must be declared and from this the person can deduct any expenses of property maintenance. The tax varies from 19% to 46%.

Capital Gains Tax

Capital gains in Italy are taxed at a flat 12.5%. Property kept for more than five years if sold is not liable to any capital gains tax in Italy. However, if sale of a property is made before five years from the time of its acquisition then you are subject to pay 20% of the gains earned from the purchase.

Wealth tax

There is no wealth tax in Italy unlike many other European countries

VAT

VAT in Italy applies the same rules as that of the European Union Value Added Tax system. Every service or product that comes under business transaction is taxed in Italy. On basic products VAT rates are from 4% to 10%. Vat on business transactions is around 20%. VAT is charged on services and assets as well. The tax rates for assets in Italy range from 4% to 8% of total value.