Tax pills
Source: site justlanded.com – extract from Living and Working in Italy
THE ITALIAN TAX SYSTEM:
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ITALY has a pay-as-you-earn (PAYE) system of income tax called: “IMPOSTA SUL REDDITO DELLE PERSONE FISICHE/IRPEF”, whereby employees’ tax is withheld at source by employers.
TAX PERIOD:
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The tax year is the same as the calendar year and income is taxed in the year in which the payment or advantage is received. Each person is taxed individually and, although a married couple may file a joint tax return, they’re taxed separately.
LEVEL OF TAXATION:
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Italian income tax has traditionally been among the highest in the EU and, although the rates have been reduced in recent years, it’s still above the EU average. On the other hand, tax allowances are more generous than in some other countries.
FIELD STUDIES (STUDI DI SETTORE):
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The tax authorities may estimate your taxable income based on your perceived wealth. All taxpayers must list (on a one-page riccometro form) their possessions and liabilities, such as homes, cars, boats and motorbikes, whether they employ household help, whether their spouse works, and whether they have dependent family members.
HOW THESE INFORMATIONS WORKS:
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This information is used to determine your financial situation and whether you’re entitled to certain social services. Therefore, if you’re a millionaire and declare the income of a shop assistant, it would be wise not to live in a palazzo and drive a luxury car!
PENALTY SYSTEM:
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Severe sanctions, including larger fines, were introduced for TAX EVASION IN 2000.
