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For those residing abroad with income generated in Italy, I have to declare it according to the existing tax regulations.
HOW TO SUBMIT THE TAX DECLARATION?
To submit the declaration to the tax authorities in Italy, residents abroad must use the REDDITI Form (formerly the UNICO Form ).
Taxpayers can access their tax information through the following:
TAX RESIDENCY - WHAT REQUIREMENTS
To be considered a resident abroad for tax purposes, one of the following requirements must necessarily be met:
Not having been registered in the registry of residents in Italy for more than half a year (or 183 days or 184 in the case of leap months);
Not having been domiciled in Italy for more than half a year;
having had a habitual residence in Italy for less than half a year.
In addition, Italian citizens who have been erased from the registers of the resident population and emigrated to states or territories with a privileged tax regime, as identified by the Decree of the Minister of Finance of May 4, 1999, and subsequent amendments and additions, are considered residents in Italy, following Italian law, unless proven otherwise.
TAXATION OF PENSIONS OF NONRESIDENTS
Pensions paid to nonresidents of Italy by entities resident in Italy or by organizations permanently operating in our state are generally taxable in Italy.
Nonresidents in Italy are also obliged to pay additional regional and municipal IRPEF if IRPEF is due in the reference year after deducting deductions and tax credits owing for income earned abroad that has been subject to final withholding.
Conventions against double income taxation are in force in some countries, under which each contracting state identifies its tax residents.
Under the specific provisions of the double taxation treaties, pensions paid to nonresidents may be subject to the following:
To exclusive taxation in the country of residence or the government of income disbursement;
to whole taxation by a state, subject to exceeding specific exemption thresholds and application of predetermined rates (different from those provided for under current domestic tax legislation);
to concurrent taxation (i.e., both states levy a tax on the same income) with the right to a tax credit in the country of residence.
In the case of residence transfers during the reference year, if the person resides in Italy for less than half a year, the splitting of the tax period is provided only in some international Double Taxation Conventions.
In addition to residence, citizenship (exclusive or multiple) is another relevant element in defining the scope of double taxation Conventions.
The Conventions may provide for different tax regimes depending on whether the pensions are paid from the social security schemes of private sector workers or the social security schemes of public sector workers.
HOW TO APPLY FOR THE APPLICATION OF INTERNATIONAL CONVENTIONS
The pensioner who resides abroad in one of the countries with which Italy has stipulated a Convention against double taxation, if in possession of the requirements prescribed by the current regulations, can ask the INPS office that manages the benefit for the application of the rules provided by the specific Convention. In this way, if the requirements are met, it will be possible to obtain, for example, the detaxation of the Italian pension (as this income will be subject to the tax regime of the country of residence) or the application of more favourable tax treatment (e.g., taxation only if certain exemption thresholds are exceeded and application of rates different from those provided for by the current Italian tax legislation).
For this purpose, the retiree can use the appropriate form available in the Forms section:
CI531 - EP-I/1 Italian-English form;
CI532 - EP-I/2 Italian-French form;
CI533 - EP-I/3 Italian-German form;
CI534 - EP-I/4 Italian-Spanish module.
The form, to be sent, in original and by regular mail, to the INPS office in charge of the benefit, must necessarily contain the attestation of foreign tax residence by the competent foreign authority and must be accompanied by other documentation that may be necessary to demonstrate the possession of the requirements prescribed by each Convention (e.g., AIRE enrollment, citizenship).
For the attestation of foreign tax residence, if the country of residence uses its forms as an alternative to the EP-I form, the retiree may send an attestation in the original language and translate it into Italian, with a translation conforming to the original and legalized signature by the Consular Office. The Internal Revenue Service also recognizes forms in use in the foreign countries of residence of the interested parties, such as Form 6166 issued by the U.S. Internal Revenue Service, as valid for attesting tax residence.
To obtain a refund of Italian tax referred to previous years, nonresidents of Italy, who wish to apply for the application of Double Taxation Convention to get full or partial withholding of their income, may submit a request for the refund of taxes already withheld to the Operational Center of the Agenzia delle Entrate in Pescara, via Rio Sparto 21, 65100 Pescara. The request must be submitted within 48 months from the tax withheld date of application, the refund of which is sought.
The refund request must contain the certificate of residence for tax purposes in the foreign country, issued by the locally competent authority, and the necessary documentation to prove that the requirements prescribed by the Convention are met.
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I'm Natalia Bertelli, an English/Spanish to Italian legal translator. Since 2008 I have been working on contracts, judicial deeds, certificates, corporate translations for foreign clients who want to do business in Italy, get a dual citizenship or simply settle in my beautiful country.