Pages in topic:   < [1 2 3 4] >
How much tax are you actually supposed to pay in Italy?
Thread poster: Oliver Lawrence
dropinka (X)
dropinka (X)  Identity Verified
Italy
English to Italian
+ ...
Tell me about it! Jun 14, 2011

Prof. Angie G. wrote:

Sorry if I gave you the impression to be arrogant, forgive me, it is tax time here, as you know, and I am particularly disappointed about the matter.

My apologies again

A big hug!

I know exactly how you feel, Angio! Just reprimanded my accountant yesterday for a blunder of his which would have cost me almost 1,000 euros...

Claudia

[Edited at 2011-06-14 08:36 GMT]


 
sailingshoes
sailingshoes
Local time: 13:32
Spanish to English
Claudia's right Jun 14, 2011

But is INPS applied to pre-tax net income (i.e. profits before tax)?

This is important because I have very low expenses (my accountant can't believe I can't generate any more!). Those for example who live in rented accommodation/office space and have rent and other condominium expenses can deduct a lot more. Also, much to amazement of my Italian neighbours, I don't drive, so no motor costs!

The 'sistema Italia' comment referred to an old thread of Tom's.

Pr
... See more
But is INPS applied to pre-tax net income (i.e. profits before tax)?

This is important because I have very low expenses (my accountant can't believe I can't generate any more!). Those for example who live in rented accommodation/office space and have rent and other condominium expenses can deduct a lot more. Also, much to amazement of my Italian neighbours, I don't drive, so no motor costs!

The 'sistema Italia' comment referred to an old thread of Tom's.

Prof. Angie G.: I don't want to say where I'm from as this might lead to pointles ping-pong as to the advantages and woes of each country. If I get time I'll mail you the details later, using the details from your profile (if present).

Whatever about the tax system, let it be said that I enjoy living here and have great affection for the country and for the millions of hardworking Italians who suffer and pay just like me (of course excluding my plumber, geometra, builders, carpenter, Orthodondist, local bar - the list goes on - whose social benefits we are all paying!). Let's hope things slowly improve, in which case I'll be happy to make my contribution, albeit heavy.

[Modificato alle 2011-06-14 12:01 GMT]
Collapse


 
Marie-Hélène Hayles
Marie-Hélène Hayles  Identity Verified
Local time: 13:32
Italian to English
+ ...
Claudia would appear to be right Jun 14, 2011

Claudia Benetello wrote:

...I think it's the other way round. You calculate INPS on the net income and then IRPEF on the net income minus INPS.



According to this, at least:
http://www.overlex.com/leggithread.asp?id=3032

(I haven't been able to find an official source as yet.)


 
dropinka (X)
dropinka (X)  Identity Verified
Italy
English to Italian
+ ...
"Regime dei minimi" after "regime agevolato" Jun 14, 2011

Oliver Lawrence wrote:
Hi Holly,

What my accountant told me was that the "regime agevolato" (which according to him is different from the "regime dei minimi") only applies for 3 tax years, so come the fourth year you have to move into the "regime ordinario" whether you like it or not, regardless of income; the "regime ordinario" is then where you'll stay for the rest of eternity. He may not have said the bit about eternity, but I think the gist is the same.

HTH
Oliver.

Hi Oliver,

As far as I know, you can move into the "regime dei minimi" after the three years of "regime agevolato", provided that your gross income did not exceed € 30,000 the year before.

The "regime agevolato", however, has a limit of € 30,987.41 -- if you exceed it, you move straight into the "regime ordinario". For this reason, if you make € 30,500 this year and it's your third year in the "regime agevolato", you won't be able to choose the "regime dei minimi" in 2012. But if your income does not exceed € 30,000 and you're in your third year of "regime agevolato", you can choose the "regime dei minimi" next year.

Claudia

[Edited at 2011-06-14 12:40 GMT]


 
sailingshoes
sailingshoes
Local time: 13:32
Spanish to English
Thanks Claudia Jun 14, 2011

I think at this point we should ask Claudia to invoice us. My accountant doesn't scratch his head for less than the price of a pair of Tod's shoes.

 
Oliver Lawrence
Oliver Lawrence  Identity Verified
Italy
Local time: 13:32
Italian to English
+ ...
TOPIC STARTER
Taxable base Jun 15, 2011

So the consensus seems to be that the taxable base for INPS is the net income (net receipts less total deductibles), and that for IRPEF is the net income less INPS. But is the net income considered to include the IVA received? In other words, when a customer pays one of my invoices that has 20% IVA on it, am I then liable to pay INPS and IRPEF on that IVA amount as well?

 
dropinka (X)
dropinka (X)  Identity Verified
Italy
English to Italian
+ ...
Yes, INPS is applied on profits before tax (IRPEF) Jun 15, 2011

sailingshoes wrote:

But is INPS applied to pre-tax net income (i.e. profits before tax)?

Yes. As far as I know, INPS is applied to profits (= gross income minus expenses) before IRPEF. And IRPEF is calculated on profits minus INPS.

This is important because I have very low expenses (my accountant can't believe I can't generate any more!). Those for example who live in rented accommodation/office space and have rent and other condominium expenses can deduct a lot more. Also, much to amazement of my Italian neighbours, I don't drive, so no motor costs!

Those who own a flat and work from there can deduct 50% of condominium expenses (which in a city like Milan can be extortionate) and utility bills. It doesn't sound that bad to me... If you don't drive, you can still deduct bus tickets and the like.

Claudia


 
dropinka (X)
dropinka (X)  Identity Verified
Italy
English to Italian
+ ...
"Fatturato" does not include IVA Jun 15, 2011

Oliver Lawrence wrote:

So the consensus seems to be that the taxable base for INPS is the net income (net receipts less total deductibles), and that for IRPEF is the net income less INPS. But is the net income considered to include the IVA received? In other words, when a customer pays one of my invoices that has 20% IVA on it, am I then liable to pay INPS and IRPEF on that IVA amount as well?

As far as I know, "fatturato" does not include IVA, but only your fees + the 4% INPS the client pays you. And you will pay INPS on your "fatturato" minus deductibles and IRPEF on "fatturato" minus deductibles minus INPS.

Hope this helps!

Claudia


 
Oliver Lawrence
Oliver Lawrence  Identity Verified
Italy
Local time: 13:32
Italian to English
+ ...
TOPIC STARTER
Thanks Claudia Jun 15, 2011

Claudia Benetello wrote:

As far as I know, "fatturato" does not include IVA, but only your fees + the 4% INPS the client pays you. And you will pay INPS on your "fatturato" minus deductibles and IRPEF on "fatturato" minus deductibles minus INPS.

Claudia


 
dropinka (X)
dropinka (X)  Identity Verified
Italy
English to Italian
+ ...
Commercialista Jun 15, 2011

Oliver, too bad you don't live in Milan -- I could recommend a very good commercialista. He's far better than the one I had before, who looked down his nose at me any time I dared to ask a question!

Claudia


 
Oliver Lawrence
Oliver Lawrence  Identity Verified
Italy
Local time: 13:32
Italian to English
+ ...
TOPIC STARTER
Too bad indeed Jun 15, 2011

I had wondered if it might be a good idea to find a good accountant ANYWHERE and then deal with them via email/telephone (submitting invoices electronically and scans of receipts and things), but I suppose it's best in Italy to deal with people face-to-face.

My impression is that the quality of the personnel in the accounting profession is very variable, certainly in Italy (I have no experience of other countries).


 
dropinka (X)
dropinka (X)  Identity Verified
Italy
English to Italian
+ ...
I can ask him Jun 15, 2011

Oliver Lawrence wrote:
I had wondered if it might be a good idea to find a good accountant ANYWHERE and then deal with them via email/telephone (submitting invoices electronically and scans of receipts and things)

Oliver, I can ask him if he would be willing to do that. Contact me in private if you're interested.

Claudia


 
sailingshoes
sailingshoes
Local time: 13:32
Spanish to English
I'm doing all I can Jun 15, 2011

Those who own a flat and work from there can deduct 50% of condominium expenses (which in a city like Milan can be extortionate) and utility bills. It doesn't sound that bad to me... If you don't drive, you can still deduct bus tickets and the like.


I own the house I live in and don't really travel (except mentally) beyond the garden gate. For bills and so on I deduct 50%. It's true that if you're living in rented accommodation, especially in a large city, t... See more
Those who own a flat and work from there can deduct 50% of condominium expenses (which in a city like Milan can be extortionate) and utility bills. It doesn't sound that bad to me... If you don't drive, you can still deduct bus tickets and the like.


I own the house I live in and don't really travel (except mentally) beyond the garden gate. For bills and so on I deduct 50%. It's true that if you're living in rented accommodation, especially in a large city, the deductions can turn out to be a very good deal (as previously discussed on other threads in the Italian-language forum) since they apply to essential living expenses that would be incurred even without professional activity.

Maybe I should sell my house and move to town and rent! ▲ Collapse


 
dropinka (X)
dropinka (X)  Identity Verified
Italy
English to Italian
+ ...
Another tip (if I may) Jun 15, 2011

sailingshoes wrote:
I own the house I live in and don't really travel (except mentally) beyond the garden gate. For bills and so on I deduct 50%. It's true that if you're living in rented accommodation, especially in a large city, the deductions can turn out to be a very good deal (as previously discussed on other threads in the Italian-language forum) since they apply to essential living expenses that would be incurred even without professional activity.

Maybe I should sell my house and move to town and rent!


I usually advise fellow translators to buy "ticket restaurant" (don't know the English equivalent).

Restaurant invoices can be deducted up to 2% of your "fatturato", but if you work from home, I suppose you usually eat at home. However, you do spend some money to buy food at the supermarket. And when you eat out (only with clients or prospects, in theory), you have to collect the invoices and it's a nuisance.

What you can do is buy these so called "ticket restaurant". You pay € 488,80 for € 500 worth of "tickets" and you get one big single invoice to deduct.
Not only do you save € 11,20, but you can also use such tickets anytime you want, not just at lunch time. A lot of restaurants accept them in the evening, so you can use them to pay for your pizza when you go out with friends, and a lot of supermarkets accept them too, so you can claim for your meals at home as well.

Always bear in mind that you can deduct such costs up to 2% of your "fatturato", so if you make € 50,000 a year you can buy € 1,000 worth of "tickets" and deduct the whole amount.

I'll be happy to give you more information in private, if you're interested.

Claudia


 
sailingshoes
sailingshoes
Local time: 13:32
Spanish to English
Thanks again Jun 16, 2011

I think I'm using this 2% mainly to buy wine (there is a maximum of EUR25 per item, so you must be careful to avoid being billed - for example - for hampers at Christmas and ensure that each bottle is counted as an item), which I do discount after buying it from a wine merchant. As far as I know it comes from the same 2% as the restaurant bills.

The trick is obviously to find deductible expenses that would normally be incurred. This year I'll get the newsagent to bill me for a daily
... See more
I think I'm using this 2% mainly to buy wine (there is a maximum of EUR25 per item, so you must be careful to avoid being billed - for example - for hampers at Christmas and ensure that each bottle is counted as an item), which I do discount after buying it from a wine merchant. As far as I know it comes from the same 2% as the restaurant bills.

The trick is obviously to find deductible expenses that would normally be incurred. This year I'll get the newsagent to bill me for a daily paper, as my accountant says this is a legitimate expense.

Thanks again for your help. (Even if I can't always use all of the advice, the more that's generated, the more those reading the thead can also benefit.)

Another thing to be sure to do is to fulfil the formalities for puchases from other EU countires before buying (for example, software from another EU state). If you don't, you will have to pay a mandatory fine... plus of course more to your accountant for the added work of sorting out the mess.

My accountant always has really good suits.
Collapse


 
Pages in topic:   < [1 2 3 4] >


To report site rules violations or get help, contact a site moderator:


You can also contact site staff by submitting a support request »

How much tax are you actually supposed to pay in Italy?







TM-Town
Manage your TMs and Terms ... and boost your translation business

Are you ready for something fresh in the industry? TM-Town is a unique new site for you -- the freelance translator -- to store, manage and share translation memories (TMs) and glossaries...and potentially meet new clients on the basis of your prior work.

More info »
Anycount & Translation Office 3000
Translation Office 3000

Translation Office 3000 is an advanced accounting tool for freelance translators and small agencies. TO3000 easily and seamlessly integrates with the business life of professional freelance translators.

More info »