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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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