I have been writing these blogs 10 years this year, after sending
out my first one in 2009. Looking back at the very first one just the
other day, I saw how it had developed and how the concepts I discuss
have changed dramatically.
THE PROPOSED CHANGES
This got me thinking
about the way that the world has changed as well during this time. Last
Friday I joined the Global Climate Strike in Rome. There were about
250,000 students, protesters and concerned people; marching to spread
our concern for how we treat the world we live
in. It certainly got me thinking about how politics is going to have to
change significantly in the coming years to meet the needs and desires
of these disgruntled voters.
Which leads us nicely to the the new coalition government in Italy and their changes in the Legge di Bilancio which were approved on the 30th September. In the Legge there are many new rules that will come into force from 2020, some eco based (but not enough) and a number which may affect you. Below I have selected a few of the changes in the tax law which might interest you.
Which leads us nicely to the the new coalition government in Italy and their changes in the Legge di Bilancio which were approved on the 30th September. In the Legge there are many new rules that will come into force from 2020, some eco based (but not enough) and a number which may affect you. Below I have selected a few of the changes in the tax law which might interest you.
1. If you are in the market for a new car, then incentives will be
given, up to €6000 for purchasing a new electric, hybrid, small gas or
small diesel car.
2. BUT, if you buy an SUV or an 'auto lusso', then you will be taxed of up to €3000.
3. Anyone who is working online might be caught in the trap set to try to tackle evasive tax practices by the big tech companies. Italy is following the French lead and introducing a tax of 3% on web based business revenues generated in Italy.
4. The flat tax of 7% for retirees moving to, and getting residency in Italy is fully approved from January 2019. The main caveat is that you must move to a village of no more than 20,000 inhabitants in any of the following regions:
Sardinia, Molise, Abruzzo, Puglia, Basilicata, Calabria, Sicilia.
Other terms and conditions apply, so check carefully before assuming you automatically qualify.
5. Income tax deductions will be available for anyone who carries out invoiced home renovation, purchases of eco domestic appliances, completes seismic work on their house, purchases sun curtains for balconies or buys mosquito blocks for doors, amongst other property related deductions. The following article (in Italian) provides a nice summary (once again conditions apply, so make sure you check the small print or speak with a commercialista before going ahead).
https://www.theitaliantimes.it/economia/proroga-bonus-ristrutturazioni-mobili-verde-ecobonus-legge-di-bilancio_011019/
However, please remember that this work must be 'invoiced' work and paid for by electronic means. If you pay for it in the black or in cash (even if invoiced), then it is not deductible. Although paying in the black is illegal, it will often mean you can negotitate a discount on the full price. Whilst this might make paying in cash may seem attractive, it won't afford you any income tax deduction so may turn out to be more disadvantageous than any discount.
6. The canone RAI (TV licence fee) has been reconfirmed as €90 per annum. No price increase will be applied, at least for this year.
7. And the pièce de résistance ... if you thought that IMU and TASI were hard enough to get your head around, the latest news is that they are going to be unified. No prizes for anyone who can come up with the new acronym. TASIMU???
2. BUT, if you buy an SUV or an 'auto lusso', then you will be taxed of up to €3000.
3. Anyone who is working online might be caught in the trap set to try to tackle evasive tax practices by the big tech companies. Italy is following the French lead and introducing a tax of 3% on web based business revenues generated in Italy.
4. The flat tax of 7% for retirees moving to, and getting residency in Italy is fully approved from January 2019. The main caveat is that you must move to a village of no more than 20,000 inhabitants in any of the following regions:
Sardinia, Molise, Abruzzo, Puglia, Basilicata, Calabria, Sicilia.
Other terms and conditions apply, so check carefully before assuming you automatically qualify.
5. Income tax deductions will be available for anyone who carries out invoiced home renovation, purchases of eco domestic appliances, completes seismic work on their house, purchases sun curtains for balconies or buys mosquito blocks for doors, amongst other property related deductions. The following article (in Italian) provides a nice summary (once again conditions apply, so make sure you check the small print or speak with a commercialista before going ahead).
https://www.theitaliantimes.it/economia/proroga-bonus-ristrutturazioni-mobili-verde-ecobonus-legge-di-bilancio_011019/
However, please remember that this work must be 'invoiced' work and paid for by electronic means. If you pay for it in the black or in cash (even if invoiced), then it is not deductible. Although paying in the black is illegal, it will often mean you can negotitate a discount on the full price. Whilst this might make paying in cash may seem attractive, it won't afford you any income tax deduction so may turn out to be more disadvantageous than any discount.
6. The canone RAI (TV licence fee) has been reconfirmed as €90 per annum. No price increase will be applied, at least for this year.
7. And the pièce de résistance ... if you thought that IMU and TASI were hard enough to get your head around, the latest news is that they are going to be unified. No prizes for anyone who can come up with the new acronym. TASIMU???
THE ATTACK ON CASH
There are 17 different regulations for the use of cash in Italy, from
the €15000 limit on shopping for foreign tourists to a €1000 limit on
money transfers. 20 years of regulation of cash in a country where it
is estimated that 86% of transactions are completed
with it.
But changes may be afoot if this coalition gets its way.
But changes may be afoot if this coalition gets its way.
THE PROPOSED CHANGES
The M5S and PD government are, like any good Italian government, looking
at ways to rebuild this country's coffers and balance the books. I say
this with a modicum of tongue in cheek, because although that is all
they ever seem to talk about, whether they ever
get the chance to do anything about it before the coalition falls apart
and another set of politicians comes in and change the proposals yet
again is anyone's guess. But let's give them the benefit of the doubt
this time round.
The following proposals are ones that might seriously affect the way you do business or conduct your life in Italy.
The Italian coalition government are looking at how they can incentivise the use of traceable means of payment, i.e. bancomat, credit cards and bonifico, and increase their usage in line with other northern European countries. To do this they are looking at monetary incentives in the form of a discount in the rate of IVA (VAT) on products and services or imposing penalties on high levels of cash withdrawals at the ATM.
The following proposals are ones that might seriously affect the way you do business or conduct your life in Italy.
The Italian coalition government are looking at how they can incentivise the use of traceable means of payment, i.e. bancomat, credit cards and bonifico, and increase their usage in line with other northern European countries. To do this they are looking at monetary incentives in the form of a discount in the rate of IVA (VAT) on products and services or imposing penalties on high levels of cash withdrawals at the ATM.
Under the proposals, if you pay by electronic means instead of paying by
cash then you could be eligible for a discount of 2% on IVA. However,
if you pay by cash then the IVA will increase by 1%.
Using the example of paying cash in a restaurant, you would get an IVA discount of 2% on the10% charged if you paid by card i.e. 8%, or alternatively an IVA rate of 11% if you paid in cash. A nifty move, if it ever comes into force, and one which could certainly catch many people out. If these proposals are implemented by this government or any other then it might be time to review how you make and/or receive payments to think about benefitting from this discount.
Using the example of paying cash in a restaurant, you would get an IVA discount of 2% on the10% charged if you paid by card i.e. 8%, or alternatively an IVA rate of 11% if you paid in cash. A nifty move, if it ever comes into force, and one which could certainly catch many people out. If these proposals are implemented by this government or any other then it might be time to review how you make and/or receive payments to think about benefitting from this discount.
The second way that they propose to fight the black market of cash
payments is to apply a tax on monthly cash withdrawals from ATMs, or the
sportello, where withdrawals exceed €1500 per month. A 2% tax would be
applied if you superseded this limit. Equally,
the proposal seeks to reward those who use electronic means of payment
with a 2% tax credit directly into their account. How they will
calculate this is still being disputed.
It remains to be seen how the proposals with be implemented, but both are currently being considered seriously with a view to adding an amendment to the recently approved raft of measures in the Legge di Bilancio 2019. Don't get caught out if they come into force!
It remains to be seen how the proposals with be implemented, but both are currently being considered seriously with a view to adding an amendment to the recently approved raft of measures in the Legge di Bilancio 2019. Don't get caught out if they come into force!
These proposals and rules are changing almost daily at the moment and
just this morning I have seen another, which should come into force, and
which will allow deductions for income tax purposes, e.g. scontrini at
the farmacia or the Ecobonuses for house renovations,
ONLY if they are paid by bancomat, credit card or bonifico.
In short, they are trying to disincentivise the use of cash as much as possible. This comes with a promise that if sufficient revenue is generated for the state, then the rate of IVA will not increase in 2020 and 2021 (as is proposed) and they will also look at tax deductions for individuals and families. The mind boggles.
In short, they are trying to disincentivise the use of cash as much as possible. This comes with a promise that if sufficient revenue is generated for the state, then the rate of IVA will not increase in 2020 and 2021 (as is proposed) and they will also look at tax deductions for individuals and families. The mind boggles.
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