IVIE for 2013

In case anyone wants to know what the latest is on this subject, the papers are reporting that there are no changes expected to this tax. It has not been suspended like IMU on Prima Casa. Watch this space...

Does anyone know the rules on this? Is UK council tax deductible , is it on the band value or purchase value. I've just read tax is also (may have always been) on pensions , deposit a/c's etc....

I'm afraid council tax isn't deductible which seems unfair as property taxes in other countries are. It is on the purchase value if you can prove it or the current value if not. The info I saw said the current value would be your council tax value but it wasn't clear if it was the upper or lower of the band. The tax is on any asset held abroad sadly.

Thanks DD, it just shows how easy it is to get the wrong information (as it changes here in Italy so much). The other thing I understood was that it was only if you are "tax resident" here, not just resident?

I think the Italian tax man assumes you are tax resident here if you spend more than 183 days and are registered as resident at the comune so it would be pretty hard to prove otherwise if you met those two requirements.

Mmm think "tax resident" is a little more complex than the 183 day rule... This is the proposed (and guidance) rules from HMRC hmrc.gov.uk/budget-updates/11dec12/stat-res-test-note.pdf (need to cut and paste link into browser). So if it is for only those who are "tax resident", then it might be worth the 55 page document!

Well, that is what they Italian tax office says on its website. It might be more complicated from the UK point of view I agree but the Italians seem to see it quite simply.

The general rule is that you look at the tax residence position of each individual under the rules of the respective company. If, under those rules you are tax resident in only one of the countries then that is it. If, however, you are resident under the rules of each country in both countries it is necessary to look at the UK/Italy Double Tax Agreement which provides that you can only be resident in one country for tax purposes. The DTA also provides for a tie breaker to determine which country you are tax resident in and which you are not.

The new rules introduced in respect of UK tax residence and non residence make it easier than the old rules to determine if you are UK tax resident or not. In many cases it may be possible to influence the outcome if, under the new rules, you are near the margin. Anyone who has become a Resident in Italy and registered at the Commune and who spends more than 183 days in Italy will certainly be Italian Tax Resident under the Italian rules. However they may well be UK Tax Resident under the new UK rules, in some cases even if they are only in the UK for as little as 16 days in a tax year (although many will need to be in the UK for more than that. Under the old rules it was possible to be UK Tax Resident with only 1 day spent in the UK. In such cases the tie breaker may mean that UK TAX Residence prevails, or not depending on the individual's circumstances.

If the DTA is needed to establish the Tax Residence then it will be necessary to claim to the relevant tax authority that you are not resident by virtue of the DTA.

As I understand it IVIE is only payable by Italian Tax Residents and should not be payable merely because you are a registered Resident - even if you spend 183 days or more in Italy.

Thanks Panner, it still looks a horror to us (and yes I've read the DTA and the new 55 UK rules/guidance on it). To top it all we have government private pensions, which I understand can ONLY be taxed in the UK and is even covered under the DTA....

IVIE Update

None is due for 2011 so if you didn't pay last year then that's OK. If you did pay last year then it will be carried over to 2012 and you can just pay the difference if there is any.

In addition, if your property abroad is your main residence and not rented then you need only pay at the rate of 0.04%

Deadline for payment of 2012's amount is 17/06/2013.

IVIE Novità

Esempio

Full text of guidance from the Italian taxman (in Italian) with the chart showing what foreign local taxes are deductible:

IMPOSTA SUL VALORE DEGLI IMMOBILI SITUATI ALL'ESTERO (IVIE)

What do you think? Rag LINK

Typical

Having paid IMU and rubbish tax at their higher rates and worked out what it will cost to live when we move out to live in Italy full time early next year - with the prima casa IMU rate (effectively 1/3 the current cost) they then decide to change the rules again.  Will have to wait and see what the new "service" charge works out at. 

As we will be keeping an interest in a UK property and UK bank accounts and I will have an ongoing UK business involvement I am planning to structure my affairs so that whilst I will be living in Italy most of the time I will remain tax resident in the UK - avoiding all the IVIE and reporting complications until my circumstances change in a few years time. My Italian tax return will be restricted to Italian source income.

If you are in ITaly more than 183 days a year you will automatically become fiscally resident in Italy - taking residence in Italy assumes that will be the case.

Residence for residence purposes (you have to register as resident if you are in Italy for more than 3 months) is not the same as residence for tax purposes. Whilst there may be a presumption that as a resident you will be tax resident (and in many cases that will be the case) it is neither automatic nor certain. Whilst being in Italy more than 183 days  makes you tax resident under the Italian rules it is also possible to be UK tax resident whilst spending less than 183 days in the UK. A person can therefore on the individual country's tax rules be resident in both countries. However, under the UK/Italy double tax agreement it is only possible to be resident in 1 of the countries. There are a series of tie breakers that determine which country that will be. 

In some circumstances you can structure your affairs to ensure that you are tax resident in the UK whilst spending the vast majority of your time living in Italy and under the UK/Italy DTA not be  tax resident in Italy.

true, but you assume that the Agenzia dell'Entrate know this..... 

Having dealt with and battled the UK Revenue for many years, as a professional accountant specialising in tax planning, I know that dealing with the Agenzia dell'Entrata will be no picnic but someone there should know the rules.

Stage 1 is to get confirmation from the UK HMRC of position and then submit Italian tax returns on the right basis via a Commercialista. After that either the Agenzia will accept or they will not. If the Agenzia disagree with HMRC on where I am resident then the two authorities must, under the DTA, come to an agreement.

Could be fun and games

Hmmmm - in my experience finding anyone who knows the rules for anything is almost impossible in Italy. The rules change so often it is like trying to hit a moving target.
All the accountants I have encountered here have almost zero experience of DTA. The trick I think is finding one that is honest enought to say when they don't know something and be willing and prepared to find out. There are far too many who will bluff and bluster to sound knowledgeable. Of course it is alays the client who picks up the bill for the accountant's mistakes! Not that s/he would admit to having made any.
I'm currently on my 4th Italian accountant (or is it 5th - losing count!).

Fortunately the DTA rules are fixed as part of an international agreement and can only be changed by mutual agreement following negotiations between the relevant states. They are the same in the UK as Italy. As someone who has the necessary knowledge and expertise in these areas I can guide the commercialista if necessary (once I have found one that I am comfortable with - and that will probably be the hardest part)

And of course you need to remember that in Italy a commercialista who doesnt do what you ask him, doesnt do your tax return, makes you liable for fines, files false returns, etc etc  has committed no crime - and it always your fault - which I think is reprehensible.

modicasa is absolutely correct. The first tax return I submitted here (via the accountant of course) I was amazed that not only did I not have to sign it but I didn't even get to see it before it got submitted!!!
Accountants and the tax offcie work in very, very different ways to the UK Panner.

Interesting. The commercialista I have been using so far has sent me the tax returns for approval before finalising. Unfortunately he is ceasing in Italy so I need to find a new one.

In the UK it is now quite common for the tax return not to be signed by the client, but it is approved by them. If the return is wrong in most cases it is still the client who is liable for the tax/penalties even though the accountant may have done it wrong. The client then has to claim for any losses against the accountant and hope he can get some redress.

I would always recommend using a qualified and regulated commercialista rather than a possibly unregulated one, even though it might cost a bit more.

In any country there are good and a small minority of bad accountants. Unfortunately, you sometimes may not know until something goes wrong that you have a bad one.

Did those of you with a property outside Italy pay your IVIE for 2012?
If not, you can pay it with this year's tax return (ie 2013 payable in 2014) along with a small fine plus interest. It is not due if the property is worth less than €26,316 or produces an amount due of less than €200.
The amount payable is the value of your property times 0.76%. It is a type of IMU for foreign property and you will receive no bill so it has to be paid on a tax return.

Full details here

The value of your property is the value used for your council tax in the UK. Unfortunately you may not deduct the cost of your council tax from the amount due.

Admin wrote:Did those of you with a property outside Italy pay your IVIE for 2012? If not, you can pay it with this year's tax return (ie 2013 payable in 2014) along with a small fine plus interest. It is not due if the property is worth less than €26,316 or produces an amount due of less than €200. The amount payable is the value of your property times 0.76%. It is a type of IMU for foreign property and you will receive no bill so it has to be paid on a tax return. Full details here

The value of your property is the value used for your council tax in the UK. Unfortunately you may not deduct the cost of your council tax from the amount due.

I assume this only applies to people who are legally resident in Italy and not to those who are legally resident in the UK but might own a holiday home in Italy?

Correct Ghiro.
Beware those who have taken out residency in Italy. You may have to end up explaining to the Italian taxman how you are 'not really' resident.