Tax system for Ukrainians in Italy

Ukrainians living and working in Italy face several tax aspects that require careful consideration and understanding.

This article is intended to provide Ukrainian citizens residing in Italy with information about the taxation system in this country, tax obligations, and rights, as well as advice on tax reporting.

Italy taxes citizens living abroad if they have a source of income in Italy.

In this case, you will be considered a non-resident taxpayer if you meet any of the following criteria:

• If you are registered in the Italian population register maintained by the administration of anybody (Anagrafe), less than 183 days of the calendar year.
• If you do not have any economic or social interests that last more than 183 days of the calendar year.

That is, if you live in Italy for less than 183 days during a calendar year and do not receive any income in Italy, for example from a pension, rent, interest, etc., you will not need to pay tax in Italy.

In general, the taxation system in Italy is based on the principles of equality and progressivity.

The main types of taxes for residents of Italy are:

• personal income tax (Irpef)
• value added tax (IVA)
• real estate tax.

Ukrainians working in Italy pay special attention to income tax.

The Italian tax system uses many Italian terms. It is not very convenient for non-resident foreigners who are not able to speak Italian fluently and understand all the nuances of translation.

Therefore, we draw your attention to the most important Italian tax terms and their meanings:

• Codice Fiscale is a tax identification number (TIN), which is mandatory for everyone who lives in Italy for more than 90 days a year.
• Synthetic Reliability Index (ISA): consolidated reliability indices, a form used by persons engaged in any type of business in Italy and required to declare income for more than one tax period.
• Imposta sui Redditi delle Persone Fisiche (IRPEF) –Income tax.
• Modelo Redditi PF: Income tax declaration form for non-resident taxpayers and self-employed persons.
• IRAP: Regional production tax, which is levied on activities carried out on the territory of the region. Although it depends on business activity, the most common rate is 3.9%.
• Model 730 a simplified income tax return form used by self-employed resident taxpayers, pensioners, or spouses of self-employed persons.

Personal income tax (Irpef)

Irpef is calculated based on the total income of an individual for a certain tax period. This income includes income from wages, pension payments, dividends, interest on bank deposits, and other sources.

Tariffs for calculating Irpef are progressive and depend on the amount of income.

For Ukrainians working in Italy, it is important to consider double taxation. Italy has tax treaties with many countries, including Ukraine, to avoid double taxation.

Ukrainian citizens can take advantage of these agreements and be exempt from taxation in Ukraine on certain types of income that are already taxed in Italy.

Tax obligations and rights

Ukrainians working and living in Italy have the same tax obligations and rights as residents. This means that they must file tax returns on time and pay the appropriate taxes on their income.

On the other hand, Ukrainian citizens have the right to receive various tax benefits and discounts provided for by Italian legislation.

These benefits can cover education, health insurance, and family support expenses.

For Ukrainians who are in Italy and have tax obligations, it is important to follow some tips for effective tax reporting:

• Systematically track your income and expenses. Keeping detailed financial records will help you avoid problems with the IRS.
• Consult with tax professionals. It is important to have a clear understanding of your tax obligations and rights, so it is better to seek help from professionals.
• Submit tax returns on time. Ukrainians must comply with tax deadlines to avoid fines and penalties.

Therefore, the taxation system in Italy can be difficult for Ukrainians living and working in this country.

However, with a sufficient understanding of the rules and obligations, Ukrainian citizens can successfully fulfill their tax obligations and take advantage of available tax benefits.

It is important to follow tax laws and consult with professionals to effectively manage your finances in Italy.