Categoria: Other Taxes

Italy’s 2026 Short-Term Rental Reform: Three-Property Threshold, CIN Enforcement, and EU Platform Reporting

Italy has restructured the tax and regulatory framework for short-term rentals from 1 January 2026, with a second wave of changes arriving in May 2026 under EU Regulation 2024/1028. The combined effect is a tighter environment for anyone letting a property for stays under 30 days — and a particularly important moment for international owners who rely on platforms such as Airbnb, Booking.com and Vrbo to reach guests.

The three-property threshold

The 2026 Budget Law has lowered the threshold at which short-term rental activity is classified as a business from five properties to three. Owning or managing three or more properties used exclusively for lettings of less than 30 days now triggers mandatory VAT registration, opening of a Partita IVA, social security contributions to INPS, and full business accounting.

This is a significant change. Small foreign investors who built a portfolio of three or four Italian apartments for vacation rental — a very common profile among international buyers — are automatically reclassified as businesses from this year, even if they previously enjoyed the straightforward cedolare secca treatment.

Cedolare secca: what stays and what changes

For non-professional hosts (one or two properties), cedolare secca remains available. The rate is 21% on the first property and 26% on each additional property, applied on gross rental income in lieu of IRPEF and local surtaxes. A proposal during the 2026 Budget Law debate to raise the first-property rate to 26% was dropped, so the pre-2026 structure has survived for the smallest landlords.

Owners above three properties lose access to cedolare secca entirely. Rental income falls into ordinary business taxation, subject to IRPEF on progressive brackets, IRAP in certain cases, and VAT where the activity takes on a hotel-like character (breakfast, cleaning between guests, reception desk).

CIN and the end of anonymous listings

Every property offered for short-term tourist use must now display a CIN (Codice Identificativo Nazionale) issued by the national accommodation database. Platforms are required to verify CIN compliance and delist properties without one. Fines for CIN violations range from €800 to €8,000 per property. Over 620,000 CINs were issued in the first year of operation — an indicator of just how actively the authorities are enforcing the new regime.

May 2026: EU platform reporting kicks in

From 20 May 2026, EU Regulation 2024/1028 requires platforms to transmit booking data directly to national authorities on a monthly basis. Owner identity, property address, number of nights booked, and amounts received will all flow automatically to the tax authorities. Foreign owners who, under previous opacity, were informally relying on platform payouts to a foreign bank account should assume that this data is now visible to the Agenzia delle Entrate in real time — and that any mismatch between declared income and reported bookings will be pursued.

Practical points for international owners

Anyone holding two properties and considering a third should run the numbers carefully — the tax, accounting and social-security burden of crossing the business threshold can easily outweigh the marginal return on a single extra unit. A different corporate structure (such as an Italian SRL) may work better at scale, but brings its own regime and compliance costs. For owners already at or above three properties, the priority is proper VAT registration and bookkeeping from day one of 2026 — corrective filings later in the year are possible but expensive.

A Note for U.S. Citizens

U.S. citizens remain taxable on worldwide rental income regardless of Italian residency status. Italian tax paid under cedolare secca or IRPEF is generally creditable in the United States via the Foreign Tax Credit, but cedolare secca’s flat structure sometimes produces mismatches with U.S. Schedule E mechanics, where expenses are normally deductible against gross rent. Properties held through Italian companies, or bank accounts used to receive rental payouts, can also trigger FBAR, FATCA, and in some cases PFIC reporting. These layers should be planned together before any scaling of Italian rental activity.

Final Considerations

The 2026 reform does not make short-term rental unattractive in Italy, but it ends the informal era. Owners who cross the three-property threshold, owners approaching it, and owners of even a single property without a CIN all face concrete compliance steps this year. Professional advice is strongly recommended before restructuring or expanding a portfolio.

Italy’s Avviso Bonario: What It Is and What to Do When You Receive One

An avviso bonario is a preliminary notice issued by the Italian Revenue Agency (Agenzia delle Entrate) when automated or formal checks of a tax return reveal possible irregularities. It is not yet a formal assessment and not yet a tax bill — it is an invitation to either pay what the Agency believes is due, or demonstrate why the Agency is wrong, at substantially reduced penalties. For foreign residents and international businesses operating in Italy, handling it correctly is essential: ignoring the notice almost always leads to enforcement action at a much higher cost.

When and How It Arrives

The avviso bonario is generated after one of two types of control performed on a return already filed:

The automated check (controllo automatizzato), under Article 36-bis of Presidential Decree 600/1973 for direct taxes and Article 54-bis of Presidential Decree 633/1972 for VAT, is a computerised matching between what was declared and what was actually paid or withheld.

The formal check (controllo formale), under Article 36-ter, is a deeper review where the Agency verifies supporting documentation for deductions, tax credits, withholdings and other specific items on the return.

The notice usually arrives two to three years after the return was filed. For taxpayers who filed independently, it is delivered by registered post or made available in the taxpayer’s online tax account (cassetto fiscale). For those who filed through an accountant or a CAF, the notice is transmitted electronically via the Entratel channel directly to the intermediary, who is expected to forward it promptly.

Which Taxes and Contributions Are Covered

Avvisi bonari can concern virtually every tax or contribution managed through the Italian tax return: IRPEF and IRES (personal and corporate income tax), IRAP, VAT, cedolare secca on rental income, IVIE and IVAFE on foreign real estate and financial assets, regional and municipal surcharges, substitute taxes on investment income, and withholding taxes. They also cover INPS social security contributions reported through the tax return, which is particularly relevant for self-employed professionals and holders of a partita IVA.

Payment Terms and Reduced Penalties

The key advantage of resolving an avviso bonario is a significant reduction of the statutory penalty.

For automated checks, the penalty is reduced to one-third of the ordinary amount. For formal checks, the reduction is to two-thirds. Following the 2024 reform of the Italian penalty system, the base penalty for omitted or insufficient payment is 25 percent for violations committed from 1 September 2024 onwards (it was 30 percent before that date). In practice, the effective penalty after reduction is approximately 8.3 percent for automated controls and 16.7 percent for formal ones, plus interest accrued from the original deadline to the date of payment.

To benefit from the reduction, the taxpayer must pay within 30 days from receipt of the notice. When the notice is routed through a tax intermediary, the effective deadline is 90 days from the Agency’s transmission date.

Since January 2025, installment plans have been standardised: up to 20 quarterly installments are now available regardless of the amount due. Missing the first installment — or any two later ones in a row — causes the entire balance to become immediately payable with full penalties.

What to Do If You Receive One

The first step is to check whether the figures are correct. Common triggers include F24 payments not properly matched to the return, missing or misreported withholdings, documentation not transmitted by third parties (for example, medical expenses or mortgage interest), and double-counting of tax credits.

If the notice is correct, payment is made with the pre-filled F24 form attached to the communication, or through an installment request submitted via the taxpayer’s online account.

If the notice contains errors, the taxpayer or their advisor can file a CIVIS request — an online service dedicated to the review of avvisi bonari — attaching documentation that supports the original return. The 30-day payment deadline is not automatically suspended, so the request should be filed immediately. In the majority of cases, a well-documented CIVIS submission leads to full or partial cancellation of the notice.

Ignoring the avviso bonario is the worst possible option. After the deadline, the sum is referred to Agenzia delle Entrate Riscossione, and a formal cartella di pagamento is issued with full penalties, statutory interest and collection fees. At that point, the reduced-penalty benefit is permanently lost, and recovery may include wage or bank account attachments.

A Note for U.S. Citizens and Other Foreign Taxpayers

Expats frequently receive avvisi bonari because of mismatches in the reporting of foreign income, foreign tax credits, or assets held abroad (quadro RW). Before paying, it is always worth checking whether the underlying issue is a genuine additional liability or a reporting mismatch that can be corrected. In many cross-border situations, the notice can be cancelled by producing evidence of foreign withholding tax actually paid or of treaty-based relief. U.S. citizens should be especially careful: an Italian adjustment can change the Foreign Tax Credit position on Form 1116, and any correction on the Italian side may require a corresponding amendment in the U.S. return to preserve the credit.

Final Considerations

An avviso bonario is not yet a legal dispute — it is the final opportunity to resolve a tax position at a reduced cost and without litigation. The 30-day window is short, but it is almost always enough either to pay, to request installments, or to challenge the figures through CIVIS. Given the cross-border complexity that typically affects expats and foreign companies in Italy, the most effective course of action is to involve a qualified Italian tax professional as soon as the notice is received — well before the deadline, rather than after.

Italy’s Digital Nomad Visa: What Remote Workers Need to Know About Tax and Social Security

Italy formally launched its Digital Nomad Visa under Legislative Decree 4/2022, and in early March 2026 the government published long-awaited implementing guidelines that clarify who qualifies, what documentation is required, and — crucially — how Italian tax and social security rules apply. If you are working remotely for a client or employer based outside Italy and considering a move, understanding the tax framework is at least as important as securing the visa itself.

Who the Visa Is For

The framework distinguishes between two categories of applicant. Self-employed digital nomads are freelancers or sole traders who provide services to clients outside Italy. Remote workers are employees of a foreign company who carry out their duties entirely from Italy. Both categories require an initial residence permit valid for up to one year, renewable, but the documentation and compliance obligations differ.

To qualify, applicants must demonstrate a minimum annual income of approximately €28,000 — some consulates apply a stricter threshold in practice — along with private health insurance covering at least €30,000, a confirmed rental contract or property deed, and evidence of at least six months of relevant professional experience. Family members (spouse and dependent children) receive co-terminous residence permits and gain access to Italy’s national health service once the principal permit is issued.

How Italian Tax Works for Digital Nomads

Contrary to what some online guides suggest, Italy does not have a dedicated tax regime for digital nomad visa holders. Ordinary Italian tax rules apply from the moment you become an Italian tax resident — which occurs once you spend more than 183 days in Italy in a calendar year, register at the municipal registry office, or establish your habitual abode in Italy.

For self-employed digital nomads, the most immediately useful structure is the flat-rate regime (regime forfettario). Eligible freelancers pay a substitutive tax of 5% on a deemed percentage of gross revenues for the first five years, rising to 15% thereafter, provided annual income does not exceed €85,000. Compliance is significantly simplified, as there is no VAT to charge clients abroad and accounting requirements are minimal.

Employees or those who do not qualify for the flat-rate regime are subject to ordinary progressive income tax (IRPEF) at rates up to 43%. Some remote workers who relocate to Italy may separately qualify for the inbound workers regime (regime impatriati), which exempts 50% of qualifying employment or professional income from IRPEF for five years. However, this regime has its own eligibility conditions — including prior foreign residence of at least two of the previous three years, a commitment to remain in Italy for at least four years, and a qualification or specialisation requirement — and it must be applied for separately. Holding the digital nomad visa does not automatically confer access to it.

Social Security: A Frequently Overlooked Obligation

Self-employed visa holders must register with INPS and pay contributions to the Gestione Separata (separate social security fund) at a rate of approximately 26% on net taxable income. This adds substantially to the cost of working in Italy as a freelancer and is often underestimated at the planning stage.

For employees of foreign companies, the applicable social security framework depends on whether Italy has a totalization agreement with the employer’s home country. Where such an agreement exists — as it does with the United States — contributions may remain payable in the home country rather than in Italy for a defined period.

The Permanent Establishment Risk for Employers

One of the most significant tax risks of the digital nomad framework does not fall on the individual at all: it falls on the foreign employer. When an employee works from Italy continuously and at the employer’s direction, Italian tax authorities may classify the worker’s home office as a fixed place of business — creating a permanent establishment of the foreign company in Italy and exposing the employer’s profits to Italian corporate tax. This risk is particularly acute for employees who set up Italian tax residency on a long-term basis. Foreign employers with staff relocating under the digital nomad visa should assess their permanent establishment exposure before approving the arrangement.

A Note for U.S. Citizens

U.S. citizens are taxed by the United States on their worldwide income regardless of where they live, so moving to Italy does not eliminate the U.S. filing obligation. Italy and the United States have a double tax treaty, and Italian taxes paid on income also subject to U.S. tax are generally creditable against U.S. federal tax via the Foreign Tax Credit (Form 1116). However, the flat-rate regime (forfettario) presents a complication: because it operates as a substitutive tax rather than a standard income tax, the IRS may not treat it as a creditable foreign income tax, meaning forfettario users could face both Italian and U.S. tax on the same income without full offset. This point deserves specific analysis before choosing the forfettario option. FBAR and FATCA reporting obligations for Italian financial accounts also continue to apply regardless of which Italian tax regime is chosen.

Final Considerations

Italy’s Digital Nomad Visa gives remote workers a clear legal pathway to live and work in Italy that did not exist before. The tax picture is more complex than the visa rules alone suggest: choosing the right Italian tax structure, understanding the social security obligations, assessing the permanent establishment risk to your employer, and managing any home-country obligations simultaneously all require careful planning. The interaction between the digital nomad visa and Italy’s various incentive regimes is an evolving area, and proposed changes to the Budget Law could alter the landscape further in the near term. Professional advice tailored to your specific situation — covering both Italian and home-country tax — is essential before making the move.

Italy’s Inheritance and Gift Tax Reform: What International Families Need to Know

Italy’s Inheritance and Gift Tax Reform: What International Families Need to Know

Italy has overhauled its rules on inheritance and gift taxation through two legislative decrees — Decree 139/2024 and Decree 123/2025 — with the most significant changes taking effect on January 1, 2026. For expats, foreign nationals with property in Italy, and international families with cross-border estate plans, the reform introduces both meaningful opportunities and new compliance obligations.
Tax Rates Are Unchanged — But the Thresholds Just Got Better
Italy’s headline inheritance and gift tax rates remain the same: 4% for transfers to spouses and direct descendants (children, grandchildren), 6% for siblings and other relatives up to the fourth degree, and 8% for unrelated beneficiaries. What changed is how the tax-free threshold — called the franchigia — is calculated.
Under the old system, a mechanism known as the coacervo required the tax authority to aggregate all lifetime gifts made to a beneficiary with whatever they ultimately received through inheritance. A child who received a €600,000 gift from a parent during their lifetime had only €400,000 of their €1 million threshold left when the parent died. This aggregation rule, abolished as of January 1, 2026, had long been criticised as penalising families who used gifting as part of their estate plan.
From 2026 onward, gifts and inheritances each carry their own separate €1 million threshold per qualifying beneficiary (spouse or direct descendant). A child can now receive up to €1 million in lifetime gifts and still benefit from a full €1 million threshold upon inheritance. For siblings, the separate thresholds stand at €100,000 each. In practical terms, this change doubles the potential tax-free transfer capacity between generations for families who use both instruments.
Trusts: Now Expressly Addressed in Italian Succession Law
For the first time, Italy’s succession tax legislation expressly addresses the treatment of trusts. Previously, the framework had developed through administrative circulars and case law, leaving considerable uncertainty for international structures.
The new rules confirm that transfers of assets via trust are subject to inheritance and gift tax whenever they result in a gratuitous enrichment of beneficiaries. Crucially, the reform gives trustees and settlors a planning choice: they may elect to trigger the tax at the time assets are contributed to the trust, or defer it until assets are distributed to beneficiaries. Where beneficiaries are not yet identified, the 8% rate — applicable to transfers between strangers — applies by default. Once the tax is paid at either stage, subsequent distributions in the same kinship category are not taxed again.
The territorial rules for trust taxation follow the settlor’s residency at the time assets are contributed to the trust, not at distribution. If the settlor was an Italian tax resident when the assets entered the trust, Italian succession tax applies to all transferred assets, wherever located. Non-resident settlors face Italian tax only on Italian-sited assets.
Self-Assessment Is Now the Taxpayer’s Responsibility
Another structural change affects how the tax is collected. Under the previous system, the Agenzia delle Entrate calculated the tax owed and issued a formal notice. The reform shifts this obligation to the taxpayer: heirs and beneficiaries must now calculate, declare, and pay the inheritance tax themselves, within 90 days of the succession opening. The tax authority retains a two-year window to challenge the calculation. Electronic filing is required in most cases, though non-resident heirs may still submit declarations by registered mail.
This change increases the importance of getting professional advice promptly after a death, since errors in self-assessment can lead to penalties.
Cross-Border Estates: Who Is Taxed on What
Italy’s territorial scope for inheritance tax follows the residence of the deceased at the time of death, not the location of the assets. If an Italian tax resident dies, their worldwide estate — including foreign bank accounts, foreign real estate, and financial investments held abroad — is subject to Italian succession tax. Conversely, if a non-resident dies but owned property in Italy, only the Italian assets are within scope. Beneficiaries who are themselves Italian residents must report and pay tax on all assets received from an Italian-resident decedent, regardless of where those assets are physically located.
There is no bilateral inheritance or estate tax treaty between Italy and most countries, including the United States. Families with assets in multiple jurisdictions should model the combined tax exposure carefully.
A Note for U.S. Citizens
U.S. citizens are subject to U.S. federal estate and gift tax on their worldwide assets, regardless of where they live. Unlike the Italy-U.S. income tax treaty, there is no Italy-U.S. estate and gift tax treaty. This means a U.S. citizen who is an Italian tax resident may face both Italian inheritance/gift tax and U.S. estate or gift tax on the same transfer, with limited mechanisms to avoid double taxation.
Italy’s rates — 4% to 8% — are substantially lower than the U.S. federal estate tax rate of 40% on amounts above the exemption. The U.S. does provide a foreign death tax credit under Section 2014 of the Internal Revenue Code for foreign estate taxes paid on assets that are also subject to U.S. estate tax, but this credit has specific limitations and does not always provide full relief. For gifts, the interaction is more complex: Italy now taxes certain gift transactions that the U.S. would treat as taxable gifts, but the tax systems operate independently.
U.S. citizens in Italy who hold assets in trust structures — particularly grantor trusts used in U.S. estate planning — should review how the new Italian trust taxation rules interact with their existing structures.
Final Considerations
The 2026 reform makes Italy’s succession tax framework more transparent and, for many families, more generous in terms of available exemptions. The abolition of the coacervo is a genuine planning improvement. At the same time, the shift to self-assessment raises the stakes for accurate compliance, and the new trust rules introduce mandatory analysis for anyone with a trust structure linked to Italy.
For international families — particularly those with assets, heirs, or residency ties in multiple countries — the practical impact of these changes depends heavily on individual circumstances. Professional advice is recommended before making gifts, establishing trusts, or updating cross-border estate plans in light of the new framework.

Italy’s 2026 Crypto Tax: What the 33% Rate Means for Residents and Expats

Italy’s 2026 Crypto Tax: What the 33% Rate Means for Residents and Expats

Italy’s approach to taxing digital assets has shifted decisively with the 2026 Budget Law. The changes are significant enough that anyone living in Italy who holds cryptocurrency — or who is considering moving to Italy and has crypto holdings — needs to understand the new rules before the current tax year produces taxable events.

The New 33% Capital Gains Rate

From January 1, 2026, capital gains on most crypto-assets — including Bitcoin, Ether, and dollar-denominated stablecoins such as USDT and USDC — are subject to a 26% substitute tax that was already in place since 2023. That rate has now been raised to 33%. The increase was introduced by the 2026 Budget Law and applies to all disposal events: selling crypto for euros or other fiat currency, swapping one crypto for another, and using crypto to pay for goods or services.

The 33% rate aligns crypto gains more closely with the tax treatment of other speculative financial income under Italian law, a clear signal of the government’s intention to treat digital assets as a permanent and fully taxed asset class.

The €2,000 Threshold Is Gone

Until the end of fiscal year 2024, Italian tax residents could realize crypto gains of up to €2,000 per year without owing tax. That exemption was abolished from fiscal year 2025 onward. It does not return in 2026. Every euro of realized gain is now taxable, regardless of how small the transaction.

For occasional holders who previously relied on staying below the threshold, this change demands attention even for modest portfolio activity.

Euro Stablecoins: A Lower Rate

The 2026 Budget Law creates a specific carve-out for electronic money tokens (EMTs) — digital instruments that maintain a fixed parity with the euro and are issued under the EU’s MiCAR regulation. These include euro-denominated stablecoins such as EURC and EURS. Capital gains on these instruments are taxed at 26% rather than 33%, a meaningful difference for traders who regularly move between volatile assets and stable reserves.

Dollar-pegged stablecoins do not qualify. The preferential rate is limited to euro-denominated tokens that meet MiCAR’s reserve and licensing requirements.

The 18% Redetermination Option

The Budget Law also offers a one-time option to redetermine the cost basis of crypto holdings as of January 1, 2026 by paying an 18% substitute tax on the portfolio’s value at that date. This effectively resets the acquisition cost to the current market value, reducing the taxable gain on any future sale. For long-term holders sitting on large unrealized gains, this can substantially reduce the effective tax burden when they eventually sell — though it requires paying the 18% charge upfront.

The decision of whether to exercise this option requires calculating the likely future gain against the immediate cost, and it is most attractive when the existing cost basis is very low relative to current value.

Reporting: Quadro RW and Quadro RT

Italian tax residents must report foreign-held crypto assets in Quadro RW of the Redditi PF return. This form is used both for monitoring purposes and, in many cases, for calculating the IVAFE wealth tax on financial assets held abroad. The applicable IVAFE rate and whether it applies to crypto assets held on foreign platforms should be confirmed for each specific situation, as the rules in this area have been subject to revision. Where assets are held on Italian-licensed platforms, reporting requirements may differ.

Quadro RT is used to declare capital gains and losses. Losses can be carried forward to offset gains in the following four tax years, provided they are declared in the year they arise.

Failure to complete either form carries substantial penalties: non-reporting of foreign assets can result in penalties of 3% to 15% of the undisclosed amount, in addition to fixed sanctions.

A Note for U.S. Citizens

On the U.S. reporting side, crypto held on foreign exchanges may qualify as a specified foreign financial asset under FATCA, requiring disclosure on Form 8938 if aggregate foreign financial assets exceed the applicable filing threshold ($50,000 for individuals filing a return in the United States). FBAR reporting for foreign crypto accounts remains a developing area: FinCEN has signaled its intention to extend FBAR requirements to foreign virtual asset accounts, and U.S. citizens should monitor this closely given proposed rules currently pending finalization.

The combination of Italian income tax, potential IVAFE on foreign-held assets, U.S. federal tax obligations, and parallel reporting requirements under both systems makes cryptocurrency one of the more complex compliance areas for U.S. nationals in Italy.

Final Considerations

The 2026 changes mark a clear shift toward treating crypto-assets as mainstream financial instruments under Italian law, with the rates and reporting requirements now reflecting that approach. The abolition of the €2,000 exemption and the increase to 33% mean that even moderate holders face meaningful tax obligations that did not exist under prior rules.

Anyone with Italian tax residency and crypto holdings should review their position, confirm their cost basis documentation, and evaluate whether the 18% redetermination option makes sense in their individual circumstances. The interaction between Italian and foreign tax obligations — particularly for U.S. citizens — adds further layers that are best addressed with professional advice before the end of the tax year.

Foreign Assets and Italian Tax Residency: A Practical Guide to Quadro RW, IVAFE, and IVIE

Foreign Assets and Italian Tax Residency: A Practical Guide to Quadro RW, IVAFE, and IVIE

Becoming an Italian tax resident does not only affect how your income is taxed — it also triggers a set of obligations relating to assets you continue to hold abroad. Anyone who transfers their tax residency to Italy and retains a foreign bank account, investment portfolio, property, or equity stake must comply with Italy’s foreign asset monitoring and wealth tax framework. Failing to do so carries significant penalties. This article provides a practical overview of what is required and what it costs.

The Monitoring Obligation: Quadro RW

Every Italian tax resident who holds financial or non-financial assets outside Italy at any point during the tax year must disclose them in Quadro RW, a dedicated section of the Italian personal income tax return. The purpose is twofold: it gives the tax authorities visibility over assets held offshore, and it serves as the basis for calculating the two wealth taxes described below.

Assets subject to disclosure include foreign bank and deposit accounts, brokerage accounts, stocks and bonds held outside Italy, shares in foreign companies, investment funds domiciled abroad, foreign real estate, foreign pension accounts, cryptocurrencies held on foreign platforms, and precious metals or valuables kept outside Italian territory. The list is broad, and the Italian Revenue Agency interprets it expansively.

The reporting threshold for foreign bank accounts is an average annual balance exceeding €5,000. In practice, however, any account that at any point during the year exceeds a daily balance of €15,000 must also be reported for monitoring purposes, even if the average stays below the threshold. For all other financial assets — securities, funds, equity interests — there is no minimum threshold: they must be reported regardless of value.

Until recently, Quadro RW was only available in the longer Redditi PF form, which many employed workers were not required to file. From the 2024 tax period onward, the equivalent section — Quadro W — has been incorporated into the simplified 730 form, making compliance accessible to a broader group of taxpayers, including employees and pensioners.

IVAFE: Wealth Tax on Foreign Financial Assets

IVAFE (Imposta sul Valore delle Attività Finanziarie Estere) is an annual wealth tax levied on financial assets held abroad. The standard rate is 0.2% per year, applied to the market value of the assets as at 31 December of the relevant tax year, or the average value where no year-end market price is available.

For foreign current and savings accounts, the tax is calculated differently: a flat charge of €34.20 per account per year applies, rather than a percentage. IVAFE on bank accounts is not due if the average annual balance does not exceed €5,000.

Assets held in or through jurisdictions on Italy’s list of non-cooperative tax territories are subject to a higher rate of 0.4% — double the standard charge. This applies where the financial intermediary or the asset itself is located in a blacklisted country.

IVAFE is calculated and paid through the annual tax return. A credit is available for any similar wealth taxes paid to a foreign government on the same assets, avoiding outright double taxation — though the mechanics of the credit vary depending on the country and the nature of the asset.

IVIE: Wealth Tax on Foreign Real Estate

IVIE (Imposta sul Valore degli Immobili situati all’Estero) is the equivalent charge applied to real estate owned outside Italy. Since the 2024 tax year, the rate has been 1.06% per year, following an increase from the previous 0.76% introduced by the 2024 Budget Law.

The taxable base is generally the purchase price of the property, or its cadastral value if available in the relevant foreign country. Where neither is available, the market value at the relevant date is used. A reduced rate of 0.40% applies to property used as the taxpayer’s principal residence abroad, with a €200 deduction.

As with IVAFE, a credit is available for property taxes paid in the country where the real estate is located, which in many cases eliminates or substantially reduces the Italian charge.

Penalties for Non-Compliance

The consequences of failing to file Quadro RW are material. For assets held in EU or EEA countries, the penalty ranges from 3% to 15% of the undisclosed asset value. For assets held in non-EU countries, the range rises to 6% to 30%. Where the country involved is on Italy’s list of non-cooperative jurisdictions, penalties are doubled again. In addition, the statute of limitations for undisclosed foreign assets is extended beyond the ordinary term, giving the Revenue Agency more time to raise assessments.

A Note for U.S. Citizens

U.S. citizens living in Italy face a parallel disclosure system on top of the Italian obligations. FBAR (FinCEN Form 114) requires reporting any foreign financial account to the U.S. Treasury if the aggregate value of all foreign accounts exceeds $10,000 at any point during the calendar year. Form 8938 (FATCA) requires disclosure of specified foreign financial assets above thresholds that vary by filing status and residency. Both obligations exist independently of Quadro RW — the same accounts and assets may need to be reported in all three filings. The Italian and U.S. systems do not exchange information automatically in a way that substitutes for compliance on either side.

Final Considerations

For anyone who has recently moved to Italy and retains assets abroad — whether a bank account in their home country, a brokerage account, a pension fund, or a property — the RW obligation applies from the first year of Italian tax residency. The interaction between IVAFE, IVIE, and any foreign wealth taxes already paid requires careful calculation. Professional advice is strongly recommended before filing, particularly for complex asset structures or assets held in non-EU jurisdictions.

Italian “First Home” Tax Relief for Italian Nationals Abroad: Clarification by the Revenue Agency

With Ruling No. 312/2025, the Italian Revenue Agency clarified the scope of the “first home” tax relief for individuals who have transferred their residence abroad for work purposes and are registered with AIRE.

Following the amendments introduced by Decree-Law No. 69/2023, the tax benefit is no longer linked to citizenship but to objective criteria, focusing on the individual’s personal and professional connection with Italy.

The ruling confirms that a person who:

• moved abroad for work reasons,
• previously lived or carried out any form of activity in Italy for at least five years (not necessarily continuously),
• does not own other residential properties purchased with first-home benefits,

may apply the “first home” tax relief even if the property is not located in the municipality of birth or last Italian residence.

In particular, the Revenue Agency recognizes that the concept of “activity” includes education and university studies, even if unpaid. Therefore, purchasing a residential property in the municipality where the taxpayer completed their entire educational and university path qualifies for the tax relief, provided all other legal requirements are met.

Importantly, in these cases:

• there is no obligation to transfer residence to the municipality where the property is located,
• the property does not need to be used as a primary residence.

This interpretation significantly broadens access to the “first home” tax relief for Italians working abroad, strengthening the relevance of substantial personal and formative ties with a specific Italian municipality

Italy Confirms: Early Redemption of Pension Funds Is Taxable in Italy, Even for Expats

Italy Confirms: Early Redemption of Pension Funds Is Taxable in Italy, Even for Expats

In November 2025, the Italian Revenue Agency published Ruling No. 296/2025, which clarifies a crucial point for anyone living abroad with an Italian complementary pension fund. According to the Agency, when a taxpayer requests a full early redemption of the fund — before reaching the pension age required to access the actual pension benefit — this payment cannot be treated as a “pension” under international tax treaties.

The ruling explains that, in such cases, the payout is considered income similar to employment income, because the individual has not yet matured a true pension right. As a consequence, the payment falls under the treaty article governing employment income, not the article governing pensions. This means that even if the person now lives abroad and is registered with AIRE, the amount remains taxable in Italy, since the underlying work that generated the fund contributions was carried out in Italy.

For expatriates, the practical implication is very clear: an early redemption of an Italian complementary pension fund is not taxed exclusively in the foreign country of residence. Unless you have already reached pension age and matured the right to an actual pension benefit, Italy keeps its taxing rights. In short, an “early cash-out” does not transfer taxation abroad.

You can read the full official text of Ruling No. 296/2025 here:
https://www.agenziaentrate.gov.it/portale/documents/20143/9425539/Risposta+n.+296_2025.pdf/a2df818f-0e04-cc48-3757-7820dcf30b3c

Thinking of Moving to Italy? New Rules Favor Applicants from the U.S. with Italian Heritage

Thinking of Moving to Italy? New Rules Favor Applicants from the U.S. with Italian Heritage

Italy has updated the Decreto Flussi to create an easier pathway for descendants of Italian citizens to enter Italy for work outside the annual immigration quotas. The reform targets people of Italian origin who live in countries with a significant Italian diaspora, including the United States, and makes it simpler for them to relocate to Italy for employment.

The key change is that these individuals are no longer subject to the tight quota system that traditionally limits non-EU entries for work. For those in the USA with Italian ancestry, this means the process becomes more accessible, faster, and less uncertain, because the quota cap no longer applies to them.

The exemption, however, does not eliminate the standard employment requirements. To benefit from this channel, the person must still have a valid job offer from an employer in Italy. The employer must request the nulla osta (work authorization) through the official immigration portal. Once approved, the worker must enter Italy and sign the employment contract within the legally required timeframe.

In practice, the reform removes the hardest bureaucratic barrier—the quota limitation—while keeping intact the need for a genuine employment relationship. It is designed to encourage the return or relocation of people with Italian roots, especially from countries like the United States, by streamlining entry procedures and reducing administrative bottlenecks.

Psychologist Bonus 2025: How It Works, Who Can Apply, and What’s New

Psychologist Bonus 2025: How It Works, Who Can Apply, and What’s New

Applications for the so-called “psychologist bonus” can be submitted until November 14, 2025. This incentive, managed by INPS (the Italian National Social Security Institute), aims to support individuals who wish to begin psychotherapy but face financial difficulties.

Applications must be submitted exclusively online, either through the INPS portal (“Contribution for Psychotherapy Sessions – 2025 Applications”) or via the Multichannel Contact Center.

The measure was introduced in response to the growing psychological distress that emerged after the COVID-19 pandemic and the ongoing social and economic challenges. Established in 2022 under Decree-Law No. 228/2021 (Article 1-quater, paragraph 3), the bonus became a permanent measure in 2023 through Law 197/2022.

Eligible applicants are Italian residents with a valid ISEE (Equivalent Economic Situation Indicator) not exceeding €50,000. The benefit can be requested only once per year.

The amount granted varies according to income level:

ISEE up to €15,000 → maximum contribution of €1,500;

ISEE between €15,000 and €30,000 → maximum contribution of €1,000;

ISEE between €30,000 and €50,000 → maximum contribution of €500.

Once the application period closes, INPS will draw up regional and provincial rankings, ordered by ISEE value (from lowest to highest). In the event of a tie, priority is given to the earliest application submitted.

Beneficiaries will receive an INPS notification specifying the amount granted and a unique personal code. The accredited psychotherapist will use this code when issuing the invoice, and INPS will pay the professional directly — not the applicant.

The bonus must be used within 270 days from the publication of the ranking; after that period, the assigned code and related amount will be automatically cancelled.

Tax Return Document Checklist

Tax Return Document Checklist

As tax season approaches, it’s essential to prepare the required documentation in a timely and organized manner. Submitting all documents promptly and in full will significantly streamline the preparation and filing process, reduce back-and-forth communication, and help ensure you benefit from all available deductions.

We recommend printing this list ( click on the PDF logo above) and using it as a checklist while gathering your documents.

Please contact us if you have any doubts or if your personal or financial situation has changed during the year.

Personal Identification Documents
() Mod. 730 or Mod. Unico from the previous year (include F24 payment forms)
() Copy of your ID or passport
() Tax ID Number (Codice Fiscale)

Medical & Health-Related Expenses
() Pharmacy receipts (with Codice Fiscale and paid by card)
() Invoices for specialist visits and health tickets
() Invoices or receipts for veterinary expenses
() Funeral expenses

Financial and Employment Income
() Bank declaration for loan interest paid
() CUD (Certificazione Unica) for employment or pension income
() Foreign income tax returns and related tax payment documents

Property and Real Estate
() Cadastral report for properties purchased during the year
() Copies of any real estate sales or purchases made during the year

Deductions & Tax Credits
() ENEA Certifications (for energy savings 55% or 65%)
() Invoices and payments for renovation work (50%)
() Invoices for deductions related to furniture and appliances
() Payment confirmations for life insurance
() School tuition payment receipts
() Proof of payments for children’s sport activities (for those under 18)
() Receipts for donations to ONLUS (non-profit organizations)

Social Security & Contributions
() Payment proof for social security contributions
() Contributions for domestic service workers (INPS)

Foreign Assets
() Value and description of assets, equity, funds, and accounts held abroad
() Foreign financial availability required for IVAFE/IVIE declarations

Necessary documents for your yearly Tax Return

Tax season is fast approaching, please find a list of the Documents we need to receive to prepare your Tax Return:

Mod. 730 or Mod. Unico of the previous year and payment forms F24.
Copy of your ID/passport and Tax ID Number ( Codice Fiscale )

Pharmacy receipts ( with your Codice Fiscale and paid by credit/debit card)
Invoices for specialist visits, health tickets Invoices / receipts for medicines and veterinary expenses
Funeral expenses

Loan interest paid ( we need the bank declaration )
CUD attesting your employment / retirement income
Copies of ENEA Certifications, for energy savings of 55% and 65%
Copy of renovation costs for recovery 50% plus deductions for Furniture and Appliances.
Payment for life insurance costs
Payment for school tuition costs

Expenses for sport activities for children up to the age of 18
Payments made to Onlus

Payment of social security contributions

Cadastral report for properties purchased during the year
Copies of any real estate purchases / sales occurred during the year
Contributions for domestic service workers
Copy of any foreign income tax returns and related tax payments
Value and description of assets / funds / equity investments / financial availability held abroad

That’s the general list. Please contact us for any doubt !

Taxation of Income for Italian Residents Who Are U.S. Citizens

Understanding Tax Obligations for Dual Tax Residents

Italian residents who are also U.S. citizens face a unique and complex tax situation, as they are subject to taxation by both Italy and the United States. This article provides an overview of the key aspects of their tax obligations, double taxation treaties, and potential tax planning strategies.

1. The U.S. Tax System and Its Implications

The United States follows a citizenship-based taxation system, meaning that all U.S. citizens, regardless of where they reside, must file and potentially pay U.S. taxes. This includes Italian residents who hold U.S. citizenship.

Key U.S. tax obligations include:

• Filing an annual U.S. tax return (Form 1040), reporting worldwide income.
• Declaring foreign bank accounts via FBAR (FinCEN Form 114) if the total value of all foreign accounts exceeds $10,000.
• Filing Form 8938 (FATCA requirements) if foreign financial assets exceed certain thresholds.
• Reporting foreign business interests through Form 5471 or Form 8865, if applicable.

2. The Italian Tax System and Residency Rules

Italy imposes taxes based on residency, meaning individuals who are considered Italian tax residents must pay taxes on their worldwide income. A person is considered a resident for tax purposes if they meet any of the following criteria:

• They are registered in the Anagrafe (Resident Registry) for most of the tax year.
• They spend more than 183 days in Italy within a calendar year.
• Their principal place of business or economic interests is in Italy.

As a result, U.S. citizens residing in Italy are subject to Italian income tax (IRPEF), which applies progressively, as follows:

3. The U.S.-Italy Tax Treaty and Avoiding Double Taxation

To prevent double taxation, the U.S.-Italy Tax Treaty offers mechanisms to mitigate tax burdens:

• Foreign Tax Credit (FTC): The U.S. allows citizens to credit taxes paid to Italy against their U.S. tax liability, reducing the risk of double taxation.
• Foreign Earned Income Exclusion (FEIE): U.S. citizens who meet the physical presence or bona fide residence test can exclude up to a specified amount ($120,000 in 2023) of foreign-earned income.
• Totalization Agreement: This determines which country’s social security system applies to a taxpayer, depending on employment circumstances.

4. Special Tax Regimes for Foreigners in Italy

Certain foreign residents, including U.S. citizens moving to Italy, may benefit from preferential tax regimes, such as:

• Regime Impatriati: Offers a tax reduction (70-90%) on employment income for highly skilled workers relocating to Italy.
• Flat Tax Regime for New Residents: A fixed tax of €100,000 per year on foreign income, available for wealthy individuals.
• Pensioner Tax Regime: Retired individuals moving to specific southern Italian regions may benefit from a 7% flat tax on their foreign income.

5. Practical Tax Planning Considerations

To navigate these complex obligations efficiently, U.S. citizens residing in Italy should consider the following:

• Work with tax professionals who understand both U.S. and Italian tax laws.
• Monitor foreign financial accounts to comply with FATCA and FBAR rules.
• Optimize tax credits and exclusions to minimize overall tax liability.
• Plan for social security contributions, as Italy and the U.S. have different systems.

Conclusion

Italian residents who are also U.S. citizens must carefully manage their tax responsibilities to avoid penalties and optimize their tax situation. By leveraging tax treaties, special regimes, and professional advice, they can ensure compliance while minimizing double taxation.

USA – Beneficial Ownership Information (BOI) Report

Beneficial Ownership Information (BOI) Report: Overview & Due Date

The Beneficial Ownership Information (BOI) Report is a filing requirement introduced under anti-money laundering (AML) laws to increase transparency in corporate structures. It mandates companies to disclose details about individuals who ultimately own or control them.

Who Needs to File the BOI Report?

Entities subject to the BOI reporting requirement typically include:

• Corporations
• Limited liability companies (LLCs)
• Other entities registered with government authorities
• Some trusts and partnerships (depending on jurisdictional rules)

What is Beneficial Ownership?

A beneficial owner is an individual who:

1. Directly or indirectly owns 25% or more of the entity’s shares, voting rights, or capital; OR
2. Exercises significant control over the entity, even without direct ownership.

Information Required in the BOI Report

Entities must provide:

• Full name of each beneficial owner
• Date of birth
• Address (residential or business)
• Government-issued ID number (e.g., passport, tax ID)
• Details of ownership interest or control over the entity

BOI Report Due Date

• For existing entities: Due by December 31, 2024 (varies by jurisdiction).
• For new entities (formed in 2024 or later): Filing is required within 30 days of registration.
• Updates/Changes: Any changes in beneficial ownership must be reported within 30 days of the change.

With the February 18, 2025, decision by the U.S. District Court for the Eastern District of Texas in Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Tex.), beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) are once again back in effect. However, because the Department of the Treasury recognizes that reporting companies may need additional time to comply with their BOI reporting obligations, FinCEN is generally extending the deadline 30 calendar days from February 19, 2025, for most companies.