Taxation in Italy

Taxation in Italy is levied by the central and regional governments and is collected by the Italian Agency of Revenue (Agenzia delle Entrate).

The regime is extended for a further five years if the taxpayer meets any of the following conditions: Italian corporate entities are subject to Corporate Income Tax, IRES (Imposta sul reddito delle società) and to Regional Production Tax, IRAP (Imposta regionale sulle attività produttive).

The first reduced VAT rate (10 percent) applies to water supplies, passenger transport, admission to cultural and sports events, hotels, restaurants and some foodstuff.

The super-reduced VAT rate (4 percent) applies to TV licenses, newspapers, periodicals, books and medical equipment for the disabled.

Usually the contributions are apportioned as follows:[8] However, only 33 percent out of this 40 percent is used for INPS purposes; the rest is distributed into several other funds: The social security contribution, for employees who registered with INPS after 1 January 1996 without a previous social security position in Italy, is calculated and paid up to a maximum amount of €101,427 for the year 2018.

The Italian wealth tax on real estate properties (Imposta sul valore degli immobile situati all'estero or IVIE) owned outside of Italy by an individual who qualifies as a resident for Italian tax purposes has been introduced in Italy.

The percentage and exemption limits applicable to transfers of money or assets depend on the beneficiary's relation with the deceased person or donor.

The taxable base is the difference between the compensation received and the direct business expenses, excluding any cost of personnel and interest.

The Italian Financial Bill for the year 2014 introduced relevant changes to the municipal tax on real estate owned in Italy.