Taxation in Italy for digital nomads: how is taxation in Italy for digital nomads?
Italy has become an attractive destination for digital nomads because of its cultural richness, scenic beauty and vibrant lifestyle. For those who work remotely and wish to explore this country, it is crucial to understand the applicable tax regime and the tax benefits available. In addition, the experience of living in Italy can offer a sense of renewal and freedom to those seeking new adventures.
Tax system in Italy
Tax residence
Italian law considers any person who stays in the country for more than 183 days in a tax year to be a tax resident. Tax residents are taxed on their overall income, while non-residents are taxed only on Italian source income.
Taxable Income
Digital nomads should be aware that Italy taxes different sources of income in specific ways:
Employment income: Wages and salaries are taxed progressively, with rates ranging from 23% to 43%.
Capital income: Dividends, interest and capital gains are generally taxed at a flat rate of 26%.
Income from real estate: Rental income from real estate located in Italy is subject to progressive income tax.
Tax benefits
To attract qualified professionals, including digital nomads, Italy has implemented some tax incentives:
Impatriated Workers Scheme: Professionals who move to Italy can qualify for a 70% reduction in the tax base of income generated in the country, for up to five years. In certain regions of southern Italy, this reduction can be as high as 90%.
Forfettario regime: Small business owners and freelancers with an annual income of less than €65,000 can opt for a simplified tax regime, with a rate of 15% (or 5% for the first five years of activity).
Legal provisions
The main legal provisions governing taxation in Italy include:
TUIR (Testo Unico delle Imposte sui Redditi): Main source of Italian tax legislation.
Law 190/2014: Establishes the flat-rate regime.
Conclusion
Italy offers an attractive environment for digital nomads, not only because of its beauty and culture, but also because of the tax incentives available. However, it is essential that these professionals understand the Italian tax system and take advantage of the applicable tax benefits. That's why it's essential to find a qualified professional to carry out personalized tax planning.
If you are interested in hiring professional legal services related to tax planning, we are a firm specializing in the subject and we can help you, just get in touch via email: contato@trpuppioadvocacia.com.br, or via WhatsApp.
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