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.

Geotherm, I have found since leaving Marche and moving to a supposedly more expensive part of Italy (and some things like retaurants definitely are) that much of the charging practices in Marche are a complete rip off. So I don't think it is right to tar the whole of Italy with the same brush (taxman excluded). Overcharging ridiculously seems to be particularly prevalent in Marche.

I have also suspected for a while (just from little things I've read) that Marche is at risk of "killing the golden goose"! I suspect some are cashing in on unsuspecting immigrants like us and ripping them off. Word soon gets around on things like that, which could leave the area wide open. Just hoping Abruzzo does not go the same way as there have been rumblings here also, but for us most of the people have simply been helpful...

There is one unscrupulous estate agent in our area of northern Tuscany but otherwise all the Italians we've met or employed have been delightful, friendly and honest.

I wasn't necessarily saying it is only aimed at foreigners. It happens to Iyalians too.

Admin - what things in Marche do you think are rip offs. Forewarned is forearmed!

Hi,as this concerns me,because i receive every month bonifici esteri on my account ( these are regularly invoiced sums, monies due as compensation for work undertaken NOT money from investments,financial activity abroad etc etc)
I went to my bank, a small local cooperative credit bank, they were already well updated.I had to sign their form exonerating them from taking off the 20% from these incoming bank transfers.They informed me that it is coming very soon.That the directive from the Agenzia delle Entrate (which i subsequently found and downloaded and printed) states clearly that the agency (equivalent of HMRC) will be,thru the banks, exacting this 20% on ALL incoming "bonifici" without this official exoneration and ,always following the directive whilst yes implementing from 01/02/2014 will be applied retroactively from 01/01/2014.At this point ,i do understand that many will say "but the law says..." what has to be made clear is that (besides not even having a government at the moment) the country effectively is being run by the big powers of agencies like ufficio entrate/INPS /Equitalia and the rest and they seem to do what they like until checked by political intervention...in the meantime.....

just for the record,this has nothing to do with the Marche region this is govenment legislation implemented the the tax people and is applicable to all residents Italian and foreign alike so it covers the whole country.....

All you wonderful people here ...... thanks for GREAT info, views and experiences !!

I have not yet contacted our Bank (bancaMarche) but there is certainly nothing on their website about this (not expected I suppose).

I have a chunk of my government pension sent over on a monthly basis (already received the Feb chunk circa Feb 3rd). That is sitting in my account, untouched (so far !). I have cancelled the next transfer due to this new arrangement and will whittle down the funds that already sit in the account.

At what point should I expect the 20% to be taken and, if I were to complete the autocertification 'today' would this stop this action against the payment that has already been received earlier in the month ?

V

Thanks Modicasa

Very useful to have the self certification wording

Vicino - the banks say that they won't be in a state to take the money before June - so if that is the case it will be backdated.  However as my bank manager said, if the clients close the accounts before June, there is nothing the bank can do to claw back the money. 
Technically the autocertification should be received by the banks before the bank transfer takes place.  
Reading the bits of paper that are slowly leaking out, the tax will be applied on transfers by non resident persons - so I assume a government bank transfer will not be subject to the tax.... again something to be made clear...

Thanks Modi, I assume you are saying it will be only private individuals where the tax will be applied and not, as you say, Government bodies...

I assume so - if the tax is designed to catch out the people who have taken money out of Italy to earn some more, it would be unlikely that they would have invested it with HM Govt!

Modi - non-resident where? The tax applies to residents of Italy in everything I have read. I don't want to confuse anyone.

Admin - the wording is stupid but it is that the bonifico is coming from a non resident outside Italy.  (Therefore, presumably if you are resident in Italy and make a bonifico to another Itlaian resident it wouldnt be taxed! )

I've just re-read it. It is so unclear. What is it with tax entities - do they do it on purpose.

It does seem to imply that if the transfer is from a 'soggetto' resident in Italy then there is no deduction. I'd like to see anyone trying to get their bank to interpret it like that!

Hopefully it will be high on the Agenda when the new PM takes over, but knowing Italy I have my doubts when it will be dealt with (look at the IMU fiasco) but this is definately a Vote winner/looser if it comes to a general election.

Looks like it's been suspended for 20 days. See here

Typical Italian Politics...... do it then ask questions later.
Bunch of Muppets. 

Admin wrote:Looks like it's been suspended for 20 days. See here

Hi Admin,

I didn't see where it said suspended FOR 20 days, is it not 'suspended' full stop ?

I am sure many people here have a better grasp of the language than me !   

V

This is what my accountant says:

COLPO DI SCENA!!!

What can compare to the thrills and spills of life in Italy?

We hear today that the law relating to 20% withholding tax on overseas transfers, the subject of huge discussion (and consternation) in recent days, has been SUSPENDED, a mere 20 days after its implementation. As U-turns go, this has to be one of the most abrupt in history. The apparent justification for this is that a new inter-governmental agreement for the exchange of information on movement of capital (Common Reporting Standard) has been approved and that this renders the Italian provision unnecessary. Implementation of the 20% withholding has therefore been postponed until 1st July 2014, with the expectation that this will provide enough time for the Common Reporting Standard to come into force.

Any sums deducted from transfers arriving since 1st February are to be re-accredited.

 

At ease, everyone....

 

Judith Ruddock
 

www.studiodelgaizopicchioni.it

Phewwwwwwww!      

ghiro wrote:Phewwwwwwww!      

  Relax?? Never! We're still off to the bank today with the forms. I may not have a lot of money but I've worked hard for it and not taking any risks that some of it  could be "filched".
Most grateful thanks to everyone for all their work on this matter. 

Totally agree Logitech !

Thanks again for all of the contributions, the Forum has corralled a wide range of info and views on this one !

V

Thanks Perlasca, your accountant looks very helpful (more than mine who just shrugged when we inquired about this) think we might change to them.