20% witholding tax on transfers from outside Italy

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20% witholding tax on transfers from outside Italy

Post by Admin on Wed Feb 05, 2014 1:54 pm

From 1st February 2014 ALL transfers to Italian bank accounts from outside Italy will be subject to a 20% witholding tax. For example if you receive €100, the bank will deduct €20 and send it to the Italian tax office on your behalf. This is to do with the tax due on investments abroad. To reclaim the money, assuming it was not the result of an investment abroad, you must reclaim it on your next Italian tax return.

There is some light at the end of the tunnel - you can make an 'autodichiarazione' at your bank regarding the 'ritenute d'ingresso' to declare it is not money from investments abroad and the bank will no longer deduct the 20%.

I suspect but do not know for sure, that the 'dichiarazione' must be made annually.

Some banks have said that despite the 1/2/2014 it will take a little longer to implement.
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Re: 20% witholding tax on transfers from outside Italy

Post by Vicino on Wed Feb 05, 2014 2:56 pm

Crikey !!!

Thanks for this Admin...........Is this legally allowed ? Where can I find more ?

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Re: 20% witholding tax on transfers from outside Italy

Post by Admin on Wed Feb 05, 2014 3:04 pm

More information (Italian only) =123&cHash=eb3b39a7c09052dd06c14fe33ed2b0ef]here
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Re: 20% witholding tax on transfers from outside Italy

Post by pas55 on Wed Feb 05, 2014 3:22 pm

That should help Western Union's business
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Re: 20% witholding tax on transfers from outside Italy

Post by Vicino on Wed Feb 05, 2014 3:31 pm

Interesting.............we're with Banca Marche here and there is nothing (that I can see) on their website.

Hopefully all forum members can still find the original post !

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new 20% tax on bank transfers

Post by mammamia on Wed Feb 05, 2014 3:38 pm

Wow! This could be a real pain for us as our only money comes into Italy each month through a bank transfer! We will be trotting along to our local branch of Unicredit tomorrow.
Can I just ask, in Italian, what this new "law" "decree" or whatever is called Penny? Just so I can start the conversation tomorrow!
Thanks as ever for superb information! Rolling Eyes
PS, Is it just me, but the link you put on says nessun news!
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Re: 20% witholding tax on transfers from outside Italy

Post by Admin on Wed Feb 05, 2014 3:41 pm

If yu mention the 'ritenute d'ingresso'  am sure they will understand. Yes it is new - one of Letta's save Italy measures.  Rolling Eyes
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Re: 20% witholding tax on transfers from outside Italy

Post by Vicino on Wed Feb 05, 2014 4:08 pm

mammamia

Click on the link from admin and then click on news, it is the first item.

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Re: 20% witholding tax on transfers from outside Italy

Post by modicasa on Wed Feb 05, 2014 4:23 pm

The tax is due on earnings from abroad from investments or business activities.  If you are transferring money that does not come from such, you can sign an autodeclaration at the bank every time you trasnfer money, or a once a year version that exempts you.  This is only for Italian residents.   Banks will not be ready to apply the tax until June probably.

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Re: 20% witholding tax on transfers from outside Italy

Post by pas55 on Wed Feb 05, 2014 4:26 pm

Ah that sounds better
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Re: 20% witholding tax on transfers from outside Italy

Post by Admin on Wed Feb 05, 2014 4:30 pm

That's what I said!!!
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Thanks guys!

Post by mammamia on Wed Feb 05, 2014 4:40 pm

Thank you for that Penny. And thanks to Vicino - I have now been able to print the link!
We have sold our house out here, and just bought one in the UK. We have not been tax resident for quite a few years, but we still have to put money into our Italian bank account to pay for the expenses etc of our apartment until it too is sold. Our only money comes from a pension. Do you think it would be wise to just go and flag up with our bank that we don't think this applies to us? We have quite a good relationship with them.
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Re: 20% witholding tax on transfers from outside Italy

Post by Geotherm on Wed Feb 05, 2014 4:42 pm

Wonder when they will get around to deducting 5% or so from money you withdraw from a ATM on a foreign card, just in case!!!

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Re: 20% witholding tax on transfers from outside Italy

Post by Admin on Wed Feb 05, 2014 4:44 pm

I would Mammamia. I wouldn't run the risk personally as getting it back will take forever. If you have a bank account for stranieri I wonder if they will still do it?
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I will find out!

Post by mammamia on Wed Feb 05, 2014 4:51 pm

Yes, I think it would be best to go and have a talk to the bank as I agree with you it would take years to get any money back. I just don't want them to take it in the first place! We will go and have a talk to them this week, and then i will let everyone know how I get on! FYI we have a normal residents bank account, I think, with Unicredit, but we have never earned any money in Italy, and have never been in Italy for more than half the year, so we do not file tax returns.
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Re: 20% witholding tax on transfers from outside Italy

Post by modicasa on Wed Feb 05, 2014 5:05 pm

If you have a nonresident account then I dont think it could apply, as by default you are not resident in Italy.

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Re: 20% witholding tax on transfers from outside Italy

Post by stevegwmonkseaton on Wed Feb 05, 2014 5:30 pm

Amazing, like 4 days ago, certainly only in Italy! So someone has just recently opened an account with a view to buying there, they are just about to do so next week and have arranged a €100,000 transfer to their new Italian a/c .... Several other things come to mind, but what the hell it's Italy...

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Re: 20% witholding tax on transfers from outside Italy

Post by Cassini on Wed Feb 05, 2014 11:50 pm

Sounds as if it will be impossible to top up an Italian bank account from the UK by an electronic transfer without incurring the tax?

What happens if you take cash out of a cash machine in Italy then pay it into your italian bank account? How much would it be possible to pay in without incurring tax office attention?

Additionally, would it be possible to use a currency card to make a payment into the account - filling in the declaration at the same time?

Feels like we will all be importing notes and keeping them under the mattress.
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Re: 20% witholding tax on transfers from outside Italy

Post by stevegwmonkseaton on Thu Feb 06, 2014 12:06 am

This is another where (due to my eagerness) I missed the fact I had only come in to it on the second page... Perhaps the same for you Cassini, if so try looking at the first page...?

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Re: 20% witholding tax on transfers from outside Italy

Post by modicasa on Thu Feb 06, 2014 9:01 am

As is usual, nobody knows anything.  However, reading the normativa, it applies to residents - it would be virtually impossible to apply the law to non-residents.  Any money coming in from abroad which results from investment capital, mortgage, rent, dividends etc will be automatically debited by 20% unless you autocertify to the bank before the transfer takes place that the money does not come from such a fund.  It will hit any 'unearned' income.   Now its down to interpretation, as a pension is technically an investment fund.   So basically, if you have any choice in the matter do not take Italian residence.

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Re: 20% witholding tax on transfers from outside Italy

Post by Angela Fuller on Thu Feb 06, 2014 9:32 am

As usual, read about this NewTax on FB.....but as usual, have had some sensible replies here.......thx Penny and Hazel for your original posting....can't see it now though ????
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Re: 20% witholding tax on transfers from outside Italy

Post by Angela Fuller on Thu Feb 06, 2014 9:37 am

Think many of us, paying a mortgage here with a UK pension (state) will be packing our bags.........
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Re: 20% witholding tax on transfers from outside Italy

Post by Cassini on Thu Feb 06, 2014 11:14 am

Such useful posts. But how does the bank know you have a non resident bank account? I suspect our post office account was fudged by the post clerk. She even has statements delivered to us ℅ the Post office. We'll ask her next time we visit about making the declaration.
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Re: 20% witholding tax on transfers from outside Italy

Post by stevegwmonkseaton on Thu Feb 06, 2014 11:27 am

modicasa wrote:As is usual, nobody knows anything.  However, reading the normativa, it applies to residents - it would be virtually impossible to apply the law to non-residents.  Any money coming in from abroad which results from investment capital, mortgage, rent, dividends etc will be automatically debited by 20% unless you autocertify to the bank before the transfer takes place that the money does not come from such a fund.  It will hit any 'unearned' income.   Now its down to interpretation, as a pension is technically an investment fund.   So basically, if you have any choice in the matter do not take Italian residence.

Thanks again for the great info Modi. I see what you are saying about pensions and these days things are very much more difficult to clarify with the numerous different derived pensions. However here in the UK most pensions (private and state) are tax deducted at source and it could be argued are "earned" income. Still, it would likely again come down to you "tax residency" status. I don't particularly care who gets the tax (they are all robbers to me), but do object to the ever moving goal posts and certainly to paying tax to both countries! I certainly agree with your comment on Italian residence, but that in itself will pose some more minor problems.

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Re: 20% witholding tax on transfers from outside Italy

Post by Admin on Thu Feb 06, 2014 3:32 pm

You have to remember that both the UK and Italy require you to pay tax on your worldwide income. You have to make the decision where your residence is.

In the past no-one checked and you could 'wing it' and have residency in both countries (or none) fairly easily. This is no longer the case as one is checking with the other. You need to make a decision where it is and orgainse yourself accordingly. If it is Italy then sign the autodichiarazione. If it is not Italy then change your residency, pay the extra IMU and make sure your bank account is a non-resident's account. Certainly that is what I would do if I decided I wanted to be resident in the UK.
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Re: 20% witholding tax on transfers from outside Italy

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