Liable to be taxed in Italy?I am German

Stella2005 Image
07/27/2014 - 12:05

Liable to be taxed in Italy?I am German, are hired by a Swedish company, receiving my income in SEK, tax my income in Sweden as well. Since February 2014 I am on a so called business trip in Italy (working here in an office of my company), receiving daily expenses and my apartment is paid as well. I also registered in Italy since the contract of the apartment is in my name (I get the money back for the rent via my travel expense report). Besides, I am traveling in Europe, US and China for about 40% of my time. Since I am hired in Sweden and ‘only’ on a business trip, my company always told me that I will still be liable to be taxed in Sweden and not in Italy. However, I did some research and it might be that I have to pay income taxes here instead (183 days rule, registered and apartment contract). I really want to avoid it as it makes it complicated and it is also more than in Sweden, about 10%. Would it be possible not to be taxed in Italy if I do the following?1. Unregister in Italy (delete codice fiscal) by July 31 (would be 6 months since registered), 2. Change apartment contract so that my company will be the tenant, 3. Be less than 183 days in Italy (proven by travel report => do weekends and holidays count as well??), 4. In line with that: I am thinking on moving to Germany soon so that I work from a home office.I would appreciate your opinion and expertise.Thank you.

Comment

I suspect that this is ultimately a problem for your employers, and not you.  However, do you mean that you are registered at the anagrafe as a resident?  You cannot delete a codice fiscale.  All you can do is 'emigrate' out of Italy - ie tell the anagrafe office that you are leaving to go back to germany for example.  This will not affect your rental contract - it would have been better if your company had rented the apartment in their name.

I'd suggest you consult an Italian accountant, though I have found they are quite expensive compared to many other countries (probably because the Italian tax code is so complicated). I would also approach your employer for advice. Sweden may have a double taxation agreement with Italy that would allow you to reduce your Swedish tax obligation by the amounts paid to Italy.For example, U.S. citizens taxed abroad may qualify for foreign earned income and foreign housing exclusions and the foreign housing deduction. If you are a U.S. citizen living abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation ($97,600 for 2013). In addition, you can exclude or deduct certain foreign housing amounts.Sweden may have a similar tax rule, making it important that you talk to a tax professional._______________________________________________Who is liable to pay income tax in Italy?http://www.justlanded.com/english/Italy/Italy-Guide/Money/Income-Tax-LiabilityTAX GUIDE FOR FOREIGNERS (2009)http://www.agenziaentrate.gov.it/wps/wcm/connect/e9b729004289338f9c11ffe4308d5f44/guida+stranieri+eng.pdf?MOD=AJPERES&CACHEID=e9b729004289338f9c11ffe4308d5f44Living in Italyhttp://internationalliving.com/countries/italy/taxes/_______________________________________________Foreigners in Italy hit by tax changeshttp://www.thelocal.it/20131008/foreigners-in-italy-hit-by-tax-changesForeigners will now have to declare all assets, which would usually include property, shares and savings accounts, regardless of their value, after the €10,000 threshold was scrapped.Though they won't be charged any extra tax on smaller assets, they face stiff penalties for failing to declare the assets and will likely have to undergo more cumbersome reporting procedures, Gareth Horsfall, a financial planner at Spectrum IFA Group in Rome, told The Local.“A new internal team of the Guardia di Finanza (finance police) has also been set up to monitor transactions taking place abroad for Italian residents,” Horsfall said.“This is in line with European and G20 guidelines regarding a free share of tax and financial information.”In 2012, Italy introduced new taxes on foreigners who have homes overseas (0.76 percent on the rateable value if the property is in Europe and on the market value if it is outside Europe). In addition, they are also taxed on non-property foreign assets at a rate of 0.15 percent, Horsfall said.Still, foreigners will get some relief after IMU, the controversial property tax, was scrapped in August. It will be replaced next year with a service charge, which is expected to include all local taxes such as waste collection.“From 2014, it will no longer be the IMU we have known so far,” Italian Prime Minister Enrico Letta said in August.“It will have a new name, TASER or tax on municipal services.”The service tax is expected to combine all present local taxes, such as waste collections, in one bill. While calculated on a national basis, it should allow more autonomy for municipal authorities to set the tax rates.Italy's Deputy Economy Minister Pier Paolo Baretta confirmed that IMU will be superseded before the end of this year by the service tax.This could spell bad news for expats who rent property in Italy or are provided with accommodation by their employer. Under the IMU regime, the tax was payable by the property owner, not the tenant. With the service bill, however, the burden shifts to the occupant.Currently, tenants are only liable to pay rent, condominium charges, and a refuse tax. Alex Gomez, a British student living in Rome, said: “Italian taxes are really confusing and this year even more so. But it looks like tenants will have to pay this service tax on top of the other expenses or be fined.”