Tax on Property Rental Income
Income from property forms part of an individual’s income when calculating IRPEF. Property expenses are not allowed as a deduction however a flat rate of 15% of income is allowed for tax purposes.
V.A.T and other Taxes
Value Added Tax
- In most cases, VAT is 20%.
- There are reduced rates of VAT of 4.5% and 10% on basic products.
- VAT is charged on assets and services in Italy as well as on imports into Italy.
- VAT returns are made monthly. In certain cases, it is possible to make a return once a quarter.
- An annual VAT return must be filed once every year on March 15.
Wealth Taxes
There are no wealth taxes in Italy.
Capital Gains Tax
Any capital gain on shareholdings are taxed at a rate of 12.5% or 27% depending upon the significance of the shareholding sold by the individual, e.g. if more than 2% of the voting rights in respect of quoted shares are sold the higher rate of tax applies.
Gains arising from the sale of a property may also attract capital gains tax if the property were not the individual’s principal place of residence and was owned for less than 5 years.
