Increasing Taxes and Reporting Obligations for Expat Citizens Residing in Italy
There is no longer a minimum balance on an Italian Expat’s requirement to report to the Fiscal Monitoring Regime of Italy and hefty fees are assessed for failure to comply.
Expats living in Italy have been required to report their foreign financial accounts for quite some time, and there has always been a threshold. Last year the reporting threshold was €10K ($13,524). There is no longer a balance requirement, so if you are an expat living in Italy, you must report all foreign financial accounts to the Italian Fiscal Monitoring Regime – even if you only have one account in Switzerland for less than CHF 2K ($2,212).
There will be no taxation on low profile accounts, but they will need to be reported, nonetheless; and failure to report accurate and up-to-date information may result in costly fines. For Italian Residents who have never had to bother with forms such as the Foreign Asset Monitoring Return Form (filed along with the Italian income tax return no later than September 30), this new requirement may prove to be quite a burden.
Along with the termination of a foreign account balance threshold for Italian Residents, the balance threshold of €10K has also been scrapped. As such, all incoming and outgoing foreign transfers must be reported to the Italian Fiscal Monitoring Regime. As such, all foreign transfers must be properly documented.
The IMU (Municipal Real Estate Tax) is also being terminated and replaced with a service tax, although investment properties and holiday vacation homes will still be subject to the IMU.
The Municipal Real Estate Tax, or IMU, in Italy is basically an annual property tax paid to the Italian Fiscal Monitoring Regime by property owners. The IMU will no longer be assessed on properties (except investment or second homes and holiday vacation homes); instead, it will be replaced with a local service tax – a tax introduced by the Fiscal Monitoring Regime of Italy which combines all local taxes into one. Municipal costs are tallied and divided among taxpayers, so the burden should be less than it was with the IMU.
For many taxpayers, the replacement of the IMU with a local service tax means less tax liability. For some residents who rent property in Italy, this will be an additional tax burden. This is because – while the IMU was the responsibility of the property owner – the service tax is the responsibility of each taxpaying occupant.
Read the original story on the Telegraph.