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Expatriate
Executive: Italy
A
foreign national working in Italy or based
there will be taxed in Italy either as
a resident or as a non-resident.
An
individual is deemed to be tax-resident
if:
- he
is in the country for more than 183
days in a tax year; or
-
if Italy is the centre of his business
or economic interests.
Tax is due on world-wide income (both
earned and investment) and capital gains
for tax-residents, and on Italian income
and capital gains for non-tax-residents.
In the event that someone has dual tax-residency,
there will often be a double-tax treaty
which sorts it out.
Profits
or gains derived by a resident from trades,
professions or vocations carried out in
Italy including self-employment are subject
to tax; for a non-resident, such income
is taxable in Italy only if the activity
is carried on through a permanent representation.
There
are some domestic Italian tax-privileged
savings and investment instruments which
are attractive if residence is going to
last for a significant period.
Italian
law does recognise trusts, and there is
so far no general anti-avoidance rule
applying to individuals, so that there
is no need for incoming residents to be
too concerned about existing trust structures.
Since
general anti-avoidance legislation has
not progressed far in Italy, holdings
in offshore or foreign assets, whether
taken on before residence commenced, or
during residence, will probably be subject
only to income taxation. There is thus
a case for switching income-generating
assets into capital appreciation assets,
or at any rate for ensuring that gains
are not made during Italian residence
which could incur capital gains tax.
The
Italian tax rules are, however, considerably
more complicated than the above simplified
summary, and there are plans to introduce
more extensive anti-avoidance rules, so
that professional advice on the situation
of any particular individual is a necessity.
www.lowtax.net
contains extensive information on the
investment, tax and legal regimes in 35
of the main offshore jurisdictions. Further
information is available in our Investment
Information Providers Section, and
the four main types of offshore investment
are described in the Guide
to Offshore Investment on this site.
NB: The suggestions given above do not
constitute investment advice. They are intended
only to assist individuals in finding appropriate
professional advice, which is essential
for anyone planning offshore investment.
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