Is Italy still territorial tax based?
- Thread starter Wellington
- Start date
- Status
Nice apartment in Monaco - 200k+ per year.
Nice apartment in Italy - 40-80k per year.
So it does make sense for some people.
I considered Italy as an option for my main tax residency, however they require 183+ days for that (comparing with 60+ on Cyprus).
I spend a lot of time in Spain, so for me splitting my time in Italy and Spain would work only if nobody will actually count my days in Italy (so declaring a residence in Italy but spending less than︀ 183 days there. And of course spending less than 183 in Spain).
Nice apartment in Italy - 40-80k per year.
So it does make sense for some people.
I considered Italy as an option for my main tax residency, however they require 183+ days for that (comparing with 60+ on Cyprus).
I spend a lot of time in Spain, so for me splitting my time in Italy and Spain would work only if nobody will actually count my days in Italy (so declaring a residence in Italy but spending less than︀ 183 days there. And of course spending less than 183 in Spain).
Let me know where in Monaco you can find a 10 hectares park. Not everyone likes to live in a block house.
Nobody counts the days you spend in Italy. You just need to be registered in the resident population registry. This is condition 1 of the 3 alternatives available for the flat tax (the other 2 being (de facto) resident or domiciled).
Toggle signature
@JohnnyDoe ”“ Your #1 Source for Guidance in Different Offshore Fields
It's a problem concerning the other country, not Italy. You need to plan wisely.
Toggle signature
@JohnnyDoe ”“ Your #1 Source for Guidance in Different Offshore Fields
No argument here.
By the way do you know how Italian tax guys treat crypto holdings for "non-doms"? In most countries with territorial taxation it's usually one of 3 scenarios:
1) They recognise crypto, but deem it "offshore" unless used to exchange on local exchanges or remitted in any form (used to by goods/services in the country or settle a domestic loan)
2) They recognise crypto, deem it "onshore" if the owner holds the keys and "offshore" otherwise (plus the same remittance rules as above).
3) They don't recognise crypto or don't care.
By the way do you know how Italian tax guys treat crypto holdings for "non-doms"? In most countries with territorial taxation it's usually one of 3 scenarios:
1) They recognise crypto, but deem it "offshore" unless used to exchange on local exchanges or remitted in any form (used to by goods/services in the country or settle a domestic loan)
2) They recognise crypto, deem it "onshore" if the owner holds the keys and "offshore" otherwise (plus the same remittance rules as above).
3) They don't recognise crypto or don't care.
There is no such a concept of "non-dom" in Italy.
Italy does NOT have a territorial taxation system.
Crypto is an asset and must be declared in a standard tax return. Whereas if you opt for the flat tax you don't have to declare any asset that is held outside of Italy.
Toggle signature
@JohnnyDoe ”“ Your #1 Source for Guidance in Different Offshore Fields
I wonder what it practically means "outside Italy" when it comes to crypto 🙂
to be able to use lump sum tax in Italy you have to become a tax resident and not to be a resident anywhere else to benefit from it, which means to stay there for a serious amount of time - I understand that holding your crypto on an exchange regulated outside︀ Italy is probably ok, but whatever you hold in self custody might be one day︁ considered "in Italy" since you're there - I get it, you don't have to report︂ anything, but practically speaking... - or am I missing something?
to be able to use lump sum tax in Italy you have to become a tax resident and not to be a resident anywhere else to benefit from it, which means to stay there for a serious amount of time - I understand that holding your crypto on an exchange regulated outside︀ Italy is probably ok, but whatever you hold in self custody might be one day︁ considered "in Italy" since you're there - I get it, you don't have to report︂ anything, but practically speaking... - or am I missing something?
you could ask for a ruling or just stay silent and pay your €100k.
this doesn't require a minimum stay
you can be fiscal resident in all the countries you wish at the same time.
Not from the Italian perspective, but it can be true for another country's taxman.
It depends on what "self custody" means. A server/node located in Italy would certainly need to be declared, a laptop probably not, a Ledger/Trezor no, as they are "wallets" like your old fashioned leather wallet in your back pocket.
Just remain silent and avoid the problem.
Toggle signature
@JohnnyDoe ”“ Your #1 Source for Guidance in Different Offshore Fields
yes, exactly
for example I currently own a property in Italy but don't spend there any time during the year and I don't intend to - I can probably make myself an Italian tax resident and pay the lump sum of 100k EUR/year (which I would benefit from) but it doesn't (as far as I understand it) make any change to my tax residency in my "home" country because of the center of life interests - DTT between my country and Italy wouldn't solve anything︀ (I believe) because it says nothing about this situaction and I would be still liable︁ the to pay the tax in my home country
for example I currently own a property in Italy but don't spend there any time during the year and I don't intend to - I can probably make myself an Italian tax resident and pay the lump sum of 100k EUR/year (which I would benefit from) but it doesn't (as far as I understand it) make any change to my tax residency in my "home" country because of the center of life interests - DTT between my country and Italy wouldn't solve anything︀ (I believe) because it says nothing about this situaction and I would be still liable︁ the to pay the tax in my home country
correct. It could be useful if you spent most of your time in a tax free or territorial taxation country.
Toggle signature
@JohnnyDoe ”“ Your #1 Source for Guidance in Different Offshore Fields
but if I would, I wouldn't need to pay Italian lump sum - or is there a scenario where it would make sense?
I don't know your situation. For me, it makes sense.
Toggle signature
@JohnnyDoe ”“ Your #1 Source for Guidance in Different Offshore Fields
Interesting topic.
Did some research about this "flat tax" - basically it works as explained:
1) no need to declare any non-Italian income, no reporting required, no wealth tax, nothing. Just pay lump sum 100k, one-page tax report.
2) no minimum stay requirements after registration in the register. Basically you can spend a couple of months in Amalfi drinking Prosecco and be a tax resident as long as you are not a tax resident in any other high-tax country (need some planning and keeping the records straight).
3) no remittance tax - you can spend your "offshore" money in Italy as much as you like,︀ no taxes on that (unlike in the UK, Ireland and other countries with remittance basis︁ taxation)
4) good food, climate, relatively cheap (comparing to the UK, US, France and Germany,︂ definitely cheaper than Dubai or Monaco). Crazy bureaucracy, nothing get done in time, shitty services︃ all around - typical South Europe. North is better and more expensive, South is worse︄ yet cheaper.
Some major caveats:
1) if you own a big chunk in a company︅ (non-Italian for this matter) and decide to sell it - you will pay CGT (need︆ to read small print on this)
2) non-EU citizens have to get a visa and︇ there are basically 2 working options - either an "investment visa" with some ridiculous demands︈ (2mil in Italian bonds or 0.5 mil in any IT company / 0.25 in a︉ startup) or a "retirement" visa with a lot of paperwork and a need for a︊ passive income (like royalty, pension or rent, not dividends from your own company)
Did I︋ miss anything?
Did some research about this "flat tax" - basically it works as explained:
1) no need to declare any non-Italian income, no reporting required, no wealth tax, nothing. Just pay lump sum 100k, one-page tax report.
2) no minimum stay requirements after registration in the register. Basically you can spend a couple of months in Amalfi drinking Prosecco and be a tax resident as long as you are not a tax resident in any other high-tax country (need some planning and keeping the records straight).
3) no remittance tax - you can spend your "offshore" money in Italy as much as you like,︀ no taxes on that (unlike in the UK, Ireland and other countries with remittance basis︁ taxation)
4) good food, climate, relatively cheap (comparing to the UK, US, France and Germany,︂ definitely cheaper than Dubai or Monaco). Crazy bureaucracy, nothing get done in time, shitty services︃ all around - typical South Europe. North is better and more expensive, South is worse︄ yet cheaper.
Some major caveats:
1) if you own a big chunk in a company︅ (non-Italian for this matter) and decide to sell it - you will pay CGT (need︆ to read small print on this)
2) non-EU citizens have to get a visa and︇ there are basically 2 working options - either an "investment visa" with some ridiculous demands︈ (2mil in Italian bonds or 0.5 mil in any IT company / 0.25 in a︉ startup) or a "retirement" visa with a lot of paperwork and a need for a︊ passive income (like royalty, pension or rent, not dividends from your own company)
Did I︋ miss anything?
---- quote start
- Anti-abuse provision: Capital gains resulting from the sale of qualified participations during the first 5 years of residency are not exempted and subject to normal Italian tax (that is, the usual Italian capital gains tax of 26% applies). Qualified participations represent 20% of the voting rights or 25% of the share capital of foreign companies (for Italian listed companies the qualifying threshold is 2% of the voting rights and 5% of the share capital)
I've lived where you live, lived in a lot of tax friendly nations (cough).
I am tired of the lack of culture, OR intellect... (being brutally honest, it gets tiresome).
Did consider returning to the carib, but it's island life again and i've resided on one or another for a decade and more.
Italy would︃ be 'ideal' as kids can go to boarding in Swiss, and we can ski in︄ Swiss - and have a home base there - its also full of culture and︅ great for sailing etc, modern amenities etc.
Malta i did look at... but it's a︆ island, wife needs grand malls and all the essentials, and kids will need a proper︇ education etc, but be within reach of their mother.
We'd likely spend 6 months in Europe...
4 months in Italy (summer) 2 months in Swiss (winter), we spent 4+ months in Europe annually prior to covid.
2wks-1 month in Africa (Kenya/Zanzibar).
Rest of the time likely Asia.
Making italy(europe) a home base doesn't necessary mean we want to live full time [f**k that]
I am tired of the lack of culture, OR intellect... (being brutally honest, it gets tiresome).
Did consider returning to the carib, but it's island life again and i've resided on one or another for a decade and more.
Italy would︃ be 'ideal' as kids can go to boarding in Swiss, and we can ski in︄ Swiss - and have a home base there - its also full of culture and︅ great for sailing etc, modern amenities etc.
Malta i did look at... but it's a︆ island, wife needs grand malls and all the essentials, and kids will need a proper︇ education etc, but be within reach of their mother.
We'd likely spend 6 months in Europe...
4 months in Italy (summer) 2 months in Swiss (winter), we spent 4+ months in Europe annually prior to covid.
2wks-1 month in Africa (Kenya/Zanzibar).
Rest of the time likely Asia.
Making italy(europe) a home base doesn't necessary mean we want to live full time [f**k that]
That's a very good plan.
Yes you need to wait 5 years for selling a business tax free. In the meantime, you can cash in dividends, and/or structure the sale in a different way if you are in a rush”¦ 😉
Don't expect Italy or anywhere else to be any better, unfortunately.
Switzerland you mean?
There are very good schools and ski slopes also in Italy.
Toggle signature
@JohnnyDoe ”“ Your #1 Source for Guidance in Different Offshore Fields
Ah was thinking le rosey.
Swiss (we have a home there). Doesn't make sense to sell it, and we pay considerable tax or fees annually.
Live in Italy though (or France, elsewhere etc) as Swiss︀ as charming as it is, gets a bit dull...
Swiss (we have a home there). Doesn't make sense to sell it, and we pay considerable tax or fees annually.
Live in Italy though (or France, elsewhere etc) as Swiss︀ as charming as it is, gets a bit dull...
No doubt it is a good one, but there are so many variables involved with choosing a school. If you choose a boarding school, then location is not so important, so maybe you can even consider England/Scotland.
Save on taxes, spend more on travel!
Toggle signature
@JohnnyDoe ”“ Your #1 Source for Guidance in Different Offshore Fields
- Status