20% witholding tax on transfers from outside Italy
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Perlasca
Flip
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sebastiano
ghiro
Smeralda
Tinca
Angela Fuller
Cassini
Geotherm
modicasa
mammamia
pas55
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19 posters
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20% witholding tax on transfers from outside Italy
First topic message reminder :
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.
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.
Admin- Admin
- Location : Italy
Posts : 714
Join date : 2013-05-16
Re: 20% witholding tax on transfers from outside Italy
If you have a nonresident account then I dont think it could apply, as by default you are not resident in Italy.
Re: 20% witholding tax on transfers from outside Italy
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...
stevegwmonkseaton- Elder
- Location : Abruzzo
Posts : 1927
Join date : 2013-05-20
Re: 20% witholding tax on transfers from outside Italy
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.
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.
Cassini- Elder
- Location : Perinaldo, Liguria
Posts : 49
Join date : 2013-05-31
Re: 20% witholding tax on transfers from outside Italy
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...?
stevegwmonkseaton- Elder
- Location : Abruzzo
Posts : 1927
Join date : 2013-05-20
Re: 20% witholding tax on transfers from outside Italy
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.
Re: 20% witholding tax on transfers from outside Italy
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 ????
Angela Fuller- Moderator
- Location : Le Marche
Posts : 746
Join date : 2013-05-20
Re: 20% witholding tax on transfers from outside Italy
Think many of us, paying a mortgage here with a UK pension (state) will be packing our bags.........
Angela Fuller- Moderator
- Location : Le Marche
Posts : 746
Join date : 2013-05-20
Re: 20% witholding tax on transfers from outside Italy
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.
Cassini- Elder
- Location : Perinaldo, Liguria
Posts : 49
Join date : 2013-05-31
Re: 20% witholding tax on transfers from outside Italy
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.
stevegwmonkseaton- Elder
- Location : Abruzzo
Posts : 1927
Join date : 2013-05-20
Re: 20% witholding tax on transfers from outside Italy
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.
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.
Admin- Admin
- Location : Italy
Posts : 714
Join date : 2013-05-16
Re: 20% witholding tax on transfers from outside Italy
A bit of clarification on the new withholding tax - it will be applied only on money coming in that is derived from 'financial activities' - ie company dividends, sale of shares, selling of mortgages etc. THe banks are to supply a form to be filled in for the opting out of said withholding tax.
Re: 20% witholding tax on transfers from outside Italy
So, am I right to assume a UK pension will be exempt Modicasa....our only income is from pension....
Angela Fuller- Moderator
- Location : Le Marche
Posts : 746
Join date : 2013-05-20
Re: 20% witholding tax on transfers from outside Italy
Modi is absolutely correct but the bank of the OP on FB sent a letter to say they would be applying it to ALL transfers from abroad unless a declaration is completed.
Angie, that's a good question. If it is a private UK pension then I guess it could be seen an investment. I don't think anyone knows for sure.
Angie, that's a good question. If it is a private UK pension then I guess it could be seen an investment. I don't think anyone knows for sure.
Admin- Admin
- Location : Italy
Posts : 714
Join date : 2013-05-16
Re: 20% witholding tax on transfers from outside Italy
According to my bank manager it wont hit pensions, the letter from his head office, says it will be only be applicable on capital of companies or from 'financial transactions' which according to the bank means the same things that would be eligibile for the TOBIN tax - however we wait for clarification.
Re: 20% witholding tax on transfers from outside Italy
Going to go to bank this week Penny and ask to fill in form.....OH's pension is v small and he does pay tax in UK on that....not eligable for tax here as too small an amount but does declare it.......Thx for advice....
Angela Fuller- Moderator
- Location : Le Marche
Posts : 746
Join date : 2013-05-20
Re: 20% witholding tax on transfers from outside Italy
Pensions (private - company) are classed as "earned" income according the link I posted HERE... and therefore should not come under this taxation, but obviously you need to complete the form (if they have them yet)....
stevegwmonkseaton- Elder
- Location : Abruzzo
Posts : 1927
Join date : 2013-05-20
Re: 20% witholding tax on transfers from outside Italy
Ha Ha Steve, Banca Marche in Gualdo knew nothing about it and had to ring their head office for more info. They were told, in true Italian style the forms should be available in June but of course they would backdate to Feb all monies owing....Great !
Angela Fuller- Moderator
- Location : Le Marche
Posts : 746
Join date : 2013-05-20
Re: 20% witholding tax on transfers from outside Italy
I thought UK's taxes were harsh but automatically out of your bank account?
That's illegal here. I am pretty sure.
That's illegal here. I am pretty sure.
TAB_Flags- Elder
- Posts : 31
Join date : 2014-02-03
Re: 20% witholding tax on transfers from outside Italy
I emailed my bank today and they emailed me back a form to sign and return. Hopefully it will be that straight forward.
Tinca- Contributor
- Posts : 7
Join date : 2013-06-12
Re: 20% witholding tax on transfers from outside Italy
I suppose the simplest answer to this, would be just to pay a UK cheque into the bank, unless that will be taxed as well. Ok you would have to pay a commission charge, but it is not a direct interbank transfer. Any thoughts on that idea??
Re: 20% witholding tax on transfers from outside Italy
Thanks Tinca. Would suggest others try to get a copy from somewhere... Anyone finding a link to such, could they post the link...
stevegwmonkseaton- Elder
- Location : Abruzzo
Posts : 1927
Join date : 2013-05-20
Re: 20% witholding tax on transfers from outside Italy
The form my bank emailed me had all my account details pre-printed on the form. I don't know if each bank has their own form. I'm with BCC in Comunanza.
Tinca- Contributor
- Posts : 7
Join date : 2013-06-12
Is today the first cash grab ?!
I'd be interested to see when the first actual cash grab is on this one ! I have yet to see a form to fill in ! Does the bank just take 20% out every month until the form arrives? Google translate at the bottom.
V
Tuttavia, i primi versamenti all'erario da parte degli intermediari (principalmente le banche) andranno effettuati il 16 luglio, conguagliando in quel versamento tutte le ritenute maturate dall'1 febbraio fino al 30 giugno (e quindi accantonate e con gli interessi). Successivamente, si verserà la trattenuta ogni 16 del mese successivo all'effettiva percezione della somma. Di fatto, a tutti i contribuenti che riceveranno un bonifico dall'estero sul proprio conto personale - e non professionale o d'impresa - sarà applicata la ritenuta, a titolo di acconto che sarà, poi, scomputata in sede di dichiarazione annuale dei redditi.
However, the first payments to the Treasury by intermediaries (mainly banks) will be performed July 16, conguagliando in that all the deemed payment accrued from February 1 until June 30 (and therefore set aside and with interest). Next, you will pay the withholding every 16th of the month following the effective perception of the sum. In fact, all taxpayers who receive a transfer from abroad on their personal account - and not professional or business - will be applied to the deduction, as an advance which will then scomputata in the annual tax return.
V
Tuttavia, i primi versamenti all'erario da parte degli intermediari (principalmente le banche) andranno effettuati il 16 luglio, conguagliando in quel versamento tutte le ritenute maturate dall'1 febbraio fino al 30 giugno (e quindi accantonate e con gli interessi). Successivamente, si verserà la trattenuta ogni 16 del mese successivo all'effettiva percezione della somma. Di fatto, a tutti i contribuenti che riceveranno un bonifico dall'estero sul proprio conto personale - e non professionale o d'impresa - sarà applicata la ritenuta, a titolo di acconto che sarà, poi, scomputata in sede di dichiarazione annuale dei redditi.
However, the first payments to the Treasury by intermediaries (mainly banks) will be performed July 16, conguagliando in that all the deemed payment accrued from February 1 until June 30 (and therefore set aside and with interest). Next, you will pay the withholding every 16th of the month following the effective perception of the sum. In fact, all taxpayers who receive a transfer from abroad on their personal account - and not professional or business - will be applied to the deduction, as an advance which will then scomputata in the annual tax return.
Vicino- Elder
- Posts : 534
Join date : 2013-05-25
Re: 20% witholding tax on transfers from outside Italy
Thank V. Looks to me they are going to take the monies at any point between the 1st Feb 14 and 16th July when payments will be first due... I'm guessing the "interest" is tax on any earned and not interest on the late paid 20%... Until the forms become available and we KNOW the bank has ours we will be using a top-up card and visiting the ATMs a lot... Caxton and FairFX look to be our best option. Think it will likely be getting on for 9-12 months before we move money over again... I sure it will al change again by then!
stevegwmonkseaton- Elder
- Location : Abruzzo
Posts : 1927
Join date : 2013-05-20
Re: 20% witholding tax on transfers from outside Italy
Help ! I am extremely worried about this 20% tax imposition. Our only income is from my husbands UK govt pension and and his works pension. Both are small lss than £500 each per month. We have an Italian mortgage of approx 500 euros a month. This is paid from the 'works' pension which is paid by bank transfer to our Banca Marche account. If this is subject to the 20% tax the mortgage will not be paid and as a consequence our house will be repossessed. Banca Marche, Gualdo, have not yet received instructions for dealing with the situation, and there are no 'auto-declaration forms' available at the moment. If this tax is to be backdated to Feb 1st we will not be able to pay it. Where does this leave us ? What should we do ? Heads and a gas oven leap to mind ! Any advice much appreciated.
Angela Fuller- Moderator
- Location : Le Marche
Posts : 746
Join date : 2013-05-20
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