IVIE and RESIDENCY

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IVIE and RESIDENCY

Post by rachel68 on Wed Jun 26, 2013 7:58 am

First topic message reminder :

I read here that being domicile resident in Italy does not mean you automatically pay IVIE. A couple of questions;-

1. When calculating how many days you are resident in Italy do you discount days out of the country if you are departing and returning to Italy? Is it important to keep note of this? I'm not sure how you prove this if you were driving out of Italy etc but nonetheless I'm curious to know how i should keep track to satisfy the tax authorities.
2. If I took up residency in late february of this year but all my earnings are from the UK where I also own property should I have paid IVIE yet?

Thanks

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Re: IVIE and RESIDENCY

Post by Gala Placidia on Fri May 02, 2014 11:12 am

Example: (Quite absurd) A Peruvian citizen, with an Italian domicile (or elective residency), gets his income from money invested in property and shares in... say Saudi Arabia. In my opinion, he should pay the bulk of his taxes in Saudi Arabia. In Italy, he should pay all the property taxes for his home, his car, taxes on tranfers and bank accounts and we should ALWAYS remember that he pays Italian  VAT on all goods and services with money from Saudi Arabia which has already been taxed at source. I should clarify that I haven't got the foggiest idea wheather Saudi Arabia apples income tax. I used that name for illustration purposes. I could have said Beluchistan or the People's Republic of Congo. As you would see, VAT is an abusive tax, as you are paying taxes with money that has already been taxed.
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Re: IVIE and RESIDENCY

Post by modicasa on Sat May 03, 2014 5:00 am

VAT is not an abusive tax, it is and was a tax on luxuries - at least thats how it was designed back in the early 70's.   The idea was that it is payable on non necessities. In the UK they have remained true to the letter of the law, you do not pay VAT/IVA on childrens clothes, foods and books/papers and medicines. ALl other European countries went for the easy option and taxed the lot.  In ITaly they did a double whammy and apply VAT also to second hand goods - which is absurd - the whole point of VAT is that is applies to new goods - so you can only pay it once.   The principle is sound, the application poor and the effects dire.  But that's the EEC for you!

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Re: IVIE and RESIDENCY

Post by Vicino on Sat May 03, 2014 7:52 am

Gala,

I like your example of the Peruvian chap with the interest in Saudi Arabia ! I totally agree with all of your thinking on VAT with the possible exception of the word 'abusive'.

'as you are paying taxes with money that has already been taxed' is particularly spot on.

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Re: IVIE and RESIDENCY

Post by stevegwmonkseaton on Sat May 03, 2014 8:16 am

Totally agree with Modi, it's not VAT that is wrong, it's the application of it on everything, this hits the poor much harder. However, perhaps the EU is the power to correct this...

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Re: IVIE and RESIDENCY

Post by Vicino on Sat May 03, 2014 9:34 am

It is indeed the application of VAT on everything, we are lucky enough to be able to cope but I do feel for the poorer people of the world who possibly have to count every penny.

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Re: IVIE and RESIDENCY

Post by Gala Placidia on Sat May 03, 2014 11:35 am

I would totally be in favour of a tax on luxury items if governments need supplementary funds.  As for "non-necessities" it would be interesting to see what some governments consider non-necessities... I still think that VAT is abusive and I would prefer a taxation system in which people will pay according to their income level, with special concessions for low-income earners, particularly families, pensioners and similar groups who can barely make it to the end of the month. That would be fair; however, I am certain that I will not see it implemented... Rolling Eyes
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Re: IVIE and RESIDENCY

Post by stevegwmonkseaton on Sat May 03, 2014 11:48 am

Gala I think you will find that VAT is there for that very reason, that people don't declare all of their income!

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Re: IVIE and RESIDENCY

Post by modicasa on Sat May 03, 2014 1:39 pm

Well its the old chestnut - indirect taxes or direct taxes.  Thatcher managed to convice the world that indirect taxation was fair -you dont have to buy it - and Berlusconi followed spectaculuarly in her footsteps raising indirect taxation (imposte) by over 18% and then claiming he had lowered taxes.  Im old fashioned and think that direct taxation is the fairest system, but it doesnt win elections as voters see the word tax and vote for the opposition.

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Re: IVIE and RESIDENCY

Post by stevegwmonkseaton on Sat May 03, 2014 2:13 pm

I see tax as a necessary evil, but then again I've never really thought it through to the nth degree.  I do know there are a lot of rich people out there  who have made a lot of money on the backs of poorer people. However something has always seemed wrong to me about having different bands of tax, after all 20% of 27 million (Adele last year) is a lot more than that of 15,000 (just above min wage in the UK)? Then again having a lower tax bracket and/or allowance does help the not so well off....?

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Re: IVIE and RESIDENCY

Post by Gala Placidia on Sat May 03, 2014 5:50 pm

Perhaps, a more balanced approach is needed and certain people hide part of their income simply because the current taxation system is abusive. I believe in a fair distribution of the tax burden, but the higher bracket discourages income tax declaration. To tax people 40% + is also abusive as the government becomes a very expensive "partner".
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Re: IVIE and RESIDENCY

Post by stevegwmonkseaton on Sat May 03, 2014 6:16 pm

Gala Placidia wrote:Perhaps, a more balanced approach is needed and certain people hide part of their income simply because the current taxation system is abusive. I believe in a fair distribution of the tax burden, but the higher bracket discourages income tax declaration. To tax people 40% + is also abusive as the government becomes a very expensive "partner".



Well I do hope they are not RC!


Last edited by stevegwmonkseaton on Sat May 03, 2014 6:21 pm; edited 1 time in total (Reason for editing : Clarification)

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