The basis for taxation in Italy is determined by an individual’s residential status. Non-residents are only taxed on income and gains arising in Italy, compared to worldwide income and gains for residents. The tax is calculated in the same way as it is for resident individuals, with income tax assessed on the aggregate income derived within Italy.
Certain types of investment income realised by non-resident individuals are subject to a final withholding tax. However, interest on Italian bonds and similar, and interest from debenture loans issued by banks and listed companies, are no longer subject to a withholding tax if received by non-resident individuals who are resident of a State with whom Italy has signed a double taxation treaty providing an exchange of information.
Inheritance and gift taxes are levied without regard to the residence of the deceased/donor or the beneficiary if the transfer is executed in Italy or if the assets are located in Italy.
Saturday, 23 January 2010
QROPS Advice: Taxation of Expatriates Living in Italy
Expatriates living in Italy will be classified as either resident or non-resident. An individual is considered resident if:
for a period of 183 days they are registered with the registry office of the Population Registry (Anagrafe), or
for a period of 183 days they have their principal place of business or residence in Italy, or
for a period of 183 days they have their centre of vital interest (i.e. his family) in Italy
When moving to the country an individual needs to register with the Population Registry and in turn remove their name from the registry on departure.
If an individual is resident in Italy for a part year then any tax credits or allowances are pro-rated based upon the period of time the individual is resident in the country during the year.
In the case where part of a resident’s income is generated overseas, the greater part of foreign income taxes paid can be credited against Italian tax if paid in accordance with tax treaties stipulated by Italy.
Italy has tax treaties with most developed countries.
Self employed individuals living in Italy are taxed differently from employed individuals and are subject to a ‘regional tax on productive activities’ (IRAP). IRAP, typically 3.9%, is applied to the value of net production resulting from the business pursued within the relevant region. IRAP is payable in advance based upon the previous year’s tax return, with the final tax bill for the year being reconciled once the relevant tax return has been filed.
Italy has been implementing a series of tax reforms over the past few years with the aim of simplifying the fiscal system within the country, including that applicable to non-residents.
full details go to http://www.ailo.org/common/externalPage.asp?intURL=/publications/default.asp&extURL=/downloads/Italy_2009.pdf
for a period of 183 days they are registered with the registry office of the Population Registry (Anagrafe), or
for a period of 183 days they have their principal place of business or residence in Italy, or
for a period of 183 days they have their centre of vital interest (i.e. his family) in Italy
When moving to the country an individual needs to register with the Population Registry and in turn remove their name from the registry on departure.
If an individual is resident in Italy for a part year then any tax credits or allowances are pro-rated based upon the period of time the individual is resident in the country during the year.
In the case where part of a resident’s income is generated overseas, the greater part of foreign income taxes paid can be credited against Italian tax if paid in accordance with tax treaties stipulated by Italy.
Italy has tax treaties with most developed countries.
Self employed individuals living in Italy are taxed differently from employed individuals and are subject to a ‘regional tax on productive activities’ (IRAP). IRAP, typically 3.9%, is applied to the value of net production resulting from the business pursued within the relevant region. IRAP is payable in advance based upon the previous year’s tax return, with the final tax bill for the year being reconciled once the relevant tax return has been filed.
Italy has been implementing a series of tax reforms over the past few years with the aim of simplifying the fiscal system within the country, including that applicable to non-residents.
full details go to http://www.ailo.org/common/externalPage.asp?intURL=/publications/default.asp&extURL=/downloads/Italy_2009.pdf
QROPS Advice: Taxation of ‘Non-Residents’ Living in Sweden
A Swedish non-resident individual is subject to Swedish income tax only on income arising from sources in Sweden. Therefore expatriates regarded as non-resident individuals will only have a limited Swedish tax liability.
Non-residents will be subject to income taxes on remuneration arising from employment undertaken in Sweden and paid by a Swedish employer. Directors' fees paid by a Swedish company are always considered to have been earned in Sweden, regardless
of whether the activities are carried on in Sweden.
There is a specific concession available for non-resident expatriates working in Sweden. Non-residents may be taxed at a flat rate of 25% with no deductions applying. The 25% tax is withheld by the employer and is the final tax due on income. In order to benefit from the 25% flat rate (known as SINK) an application must be filed with the Local Tax Authority in advance, normally by the Swedish employer. There is normally no obligation to file an annual income tax return if you only have income from Sweden that is subject to a “SINK-ruling”. Non-residents working in Sweden and receiving the main part of their employment income from
Sweden may choose between being taxed according to the resident or non-resident rules, implying that certain deductions are available.
Non-resident individuals are generally not liable to pay capital income tax, though dividends received from a Swedish company are taxable unless tax exempt under a double taxation treaty. Non-residents are not generally liable to tax on gains of shares or on capital gains from the sale of personal assets. They will only be liable to tax on the gain resulting from the sale of real estate situated in Sweden and, where applicable, rental income from letting a home in Sweden (real property or flat).
full details go to http://www.ailo.org/common/externalPage.asp?intURL=/publications/default.asp&extURL=/downloads/Sweden_2009.pdf
Non-residents will be subject to income taxes on remuneration arising from employment undertaken in Sweden and paid by a Swedish employer. Directors' fees paid by a Swedish company are always considered to have been earned in Sweden, regardless
of whether the activities are carried on in Sweden.
There is a specific concession available for non-resident expatriates working in Sweden. Non-residents may be taxed at a flat rate of 25% with no deductions applying. The 25% tax is withheld by the employer and is the final tax due on income. In order to benefit from the 25% flat rate (known as SINK) an application must be filed with the Local Tax Authority in advance, normally by the Swedish employer. There is normally no obligation to file an annual income tax return if you only have income from Sweden that is subject to a “SINK-ruling”. Non-residents working in Sweden and receiving the main part of their employment income from
Sweden may choose between being taxed according to the resident or non-resident rules, implying that certain deductions are available.
Non-resident individuals are generally not liable to pay capital income tax, though dividends received from a Swedish company are taxable unless tax exempt under a double taxation treaty. Non-residents are not generally liable to tax on gains of shares or on capital gains from the sale of personal assets. They will only be liable to tax on the gain resulting from the sale of real estate situated in Sweden and, where applicable, rental income from letting a home in Sweden (real property or flat).
full details go to http://www.ailo.org/common/externalPage.asp?intURL=/publications/default.asp&extURL=/downloads/Sweden_2009.pdf
QROPS Advice: Taxation of Expatriates Living in Sweden
The basis for taxation in Sweden is determined by an individual’s residential status. Swedish residents are taxed on their worldwide income and non-residents only on income arising from sources in Sweden.
Expatriates are considered resident in Sweden if they meet the following conditions:
they are domiciled in Sweden, i.e. have a permanent home in Sweden, or
they stay permanently in Sweden, i.e. stay continuously for more than 183 days in the country, or
they are considered to have an essential connection with Sweden after leaving the country/moving abroad
When determining whether an individual has an essential connection with Sweden, all important ties with Sweden, both economic and social, are taken into consideration by the tax authorities.
Individuals who are Swedish nationals, or foreign nationals who have been resident in Sweden for a total of ten years, are deemed to be resident in Sweden until five years have elapsed from the date of moving out of Sweden, unless the person can prove that their essential connections with Sweden have been broken. After five years the burden of proof is reversed and the tax authorities have to prove that essential ties still exist between the individual and Sweden.
An individual who is considered resident in Sweden may, at the same time, be considered resident in another country under that country's domestic legislation (dual residence). If there is a tax treaty between that country and Sweden there are normally provisions in the treaty to determine in which country a person shall be considered resident in case of dual residence, or how double taxation is to be eliminated. Sweden has negotiated double taxation treaties with over 80 countries including all countries in the Nordic region.
Special rules on taxation apply to foreign experts and key personnel. According to these regulations, only 75% of the income earned is subject to income tax and social security charges during the first three years in Sweden. Some benefits, such as school fees and allowances for moving residence, are tax exempt. These regulations apply to foreign personnel employed by a Swedish company, or a foreign company with a permanent establishment in Sweden. The employment and residence in Sweden must be
limited in time, not exceeding five years, and the employee should not have been a resident in Sweden prior to the employment.
To qualify for this exemption it is necessary to obtain a ruling from the National Tax Board, which is part of the Swedish Tax Administration. The application must be filed within three months upon arrival.
http://www.ailo.org/common/externalPage.asp?intURL=/publications/default.asp&extURL=/downloads/Sweden_2009.pdf
Expatriates are considered resident in Sweden if they meet the following conditions:
they are domiciled in Sweden, i.e. have a permanent home in Sweden, or
they stay permanently in Sweden, i.e. stay continuously for more than 183 days in the country, or
they are considered to have an essential connection with Sweden after leaving the country/moving abroad
When determining whether an individual has an essential connection with Sweden, all important ties with Sweden, both economic and social, are taken into consideration by the tax authorities.
Individuals who are Swedish nationals, or foreign nationals who have been resident in Sweden for a total of ten years, are deemed to be resident in Sweden until five years have elapsed from the date of moving out of Sweden, unless the person can prove that their essential connections with Sweden have been broken. After five years the burden of proof is reversed and the tax authorities have to prove that essential ties still exist between the individual and Sweden.
An individual who is considered resident in Sweden may, at the same time, be considered resident in another country under that country's domestic legislation (dual residence). If there is a tax treaty between that country and Sweden there are normally provisions in the treaty to determine in which country a person shall be considered resident in case of dual residence, or how double taxation is to be eliminated. Sweden has negotiated double taxation treaties with over 80 countries including all countries in the Nordic region.
Special rules on taxation apply to foreign experts and key personnel. According to these regulations, only 75% of the income earned is subject to income tax and social security charges during the first three years in Sweden. Some benefits, such as school fees and allowances for moving residence, are tax exempt. These regulations apply to foreign personnel employed by a Swedish company, or a foreign company with a permanent establishment in Sweden. The employment and residence in Sweden must be
limited in time, not exceeding five years, and the employee should not have been a resident in Sweden prior to the employment.
To qualify for this exemption it is necessary to obtain a ruling from the National Tax Board, which is part of the Swedish Tax Administration. The application must be filed within three months upon arrival.
http://www.ailo.org/common/externalPage.asp?intURL=/publications/default.asp&extURL=/downloads/Sweden_2009.pdf
QROPS Advice: The Expatriate Financial Guide for UK Expatriates working overseas
An individual who is considering a move from the UK in order to work overseas will need to take into account a number of factors, including the impact of their move upon their tax position.
One aspect is the taxation regime of the country to which the UK expatriate is moving. The tax regimes of countries around the world vary considerably. Generally, most countries will levy a tax on at least any employment income earned in the country.
Others will tax the worldwide income or capital gains of an individual, in addition, perhaps, to raising an inheritance/estate tax on the worldwide wealth of an individual if they should die whilst living in the overseas country. The exact tax regime applied will depend upon the country in question, as well as the personal circumstances of the UK expatriate, for example, the length of time they have lived in the country and/or whether they have purchased a permanent place of residence in the country. The Association of International Life Offices (“AILO”) tax guides provide an overview of the tax regimes in a number of popular destinations for UK
expatriates.
A UK expatriate’s continuing liability to UK taxes will depend upon their residence, ordinary residence and domicile status. An individual who is both resident and domiciled in the UK is liable to income and capital gains tax on their worldwide income and gains, as well as inheritance tax on worldwide assets (as a consequence of their UK domicile). For UK tax purposes residence and domicile are generally defined as follows.
full details on http://www.ailo.org/common/externalPage.asp?intURL=/publications/default.asp&extURL=/downloads/UK_Expat_Working.pdf
One aspect is the taxation regime of the country to which the UK expatriate is moving. The tax regimes of countries around the world vary considerably. Generally, most countries will levy a tax on at least any employment income earned in the country.
Others will tax the worldwide income or capital gains of an individual, in addition, perhaps, to raising an inheritance/estate tax on the worldwide wealth of an individual if they should die whilst living in the overseas country. The exact tax regime applied will depend upon the country in question, as well as the personal circumstances of the UK expatriate, for example, the length of time they have lived in the country and/or whether they have purchased a permanent place of residence in the country. The Association of International Life Offices (“AILO”) tax guides provide an overview of the tax regimes in a number of popular destinations for UK
expatriates.
A UK expatriate’s continuing liability to UK taxes will depend upon their residence, ordinary residence and domicile status. An individual who is both resident and domiciled in the UK is liable to income and capital gains tax on their worldwide income and gains, as well as inheritance tax on worldwide assets (as a consequence of their UK domicile). For UK tax purposes residence and domicile are generally defined as follows.
full details on http://www.ailo.org/common/externalPage.asp?intURL=/publications/default.asp&extURL=/downloads/UK_Expat_Working.pdf
QROPS Advice: The Expatriate Financial Guide for UK Expatriates Retiring Overseas
An individual who is considering a move from the UK to retire overseas will need to take into account a number of factors, including the impact of their move upon their tax position.
One aspect is the taxation regime of the country to which the UK expatriate is moving. The tax regimes of countries around the world vary considerably. Generally, most countries will levy a tax on any income earned in the country. Others will tax the worldwide income or capital gains of an individual, in addition, perhaps, to raising an inheritance/estate tax on the worldwide wealth of an individual if they should die whilst living in the overseas country. The exact tax regime applied will depend upon the country in question, as well as the personal circumstances of the UK expatriate, for example what length of time they have lived in the country and/or whether they have purchased a permanent place of residence in the country. The Association of International Life Offices (“AILO”) tax guides provide an overview of the tax regime in a number of popular destinations for UK expatriates.
A UK expatriate’s continuing liability to UK taxes will depend upon their residence, ordinary residence and domicile status. An individual who is both resident and domiciled in the UK is liable to income and capital gains tax on their worldwide income and gains, as well as inheritance tax on worldwide assets (as a consequence of their UK domicile). For UK tax purposes residence and domicile are generally defined as follows.
full details on http://www.ailo.org/common/externalPage.asp?intURL=/publications/default.asp&extURL=/downloads/UK_Expat_Retired.pdf
One aspect is the taxation regime of the country to which the UK expatriate is moving. The tax regimes of countries around the world vary considerably. Generally, most countries will levy a tax on any income earned in the country. Others will tax the worldwide income or capital gains of an individual, in addition, perhaps, to raising an inheritance/estate tax on the worldwide wealth of an individual if they should die whilst living in the overseas country. The exact tax regime applied will depend upon the country in question, as well as the personal circumstances of the UK expatriate, for example what length of time they have lived in the country and/or whether they have purchased a permanent place of residence in the country. The Association of International Life Offices (“AILO”) tax guides provide an overview of the tax regime in a number of popular destinations for UK expatriates.
A UK expatriate’s continuing liability to UK taxes will depend upon their residence, ordinary residence and domicile status. An individual who is both resident and domiciled in the UK is liable to income and capital gains tax on their worldwide income and gains, as well as inheritance tax on worldwide assets (as a consequence of their UK domicile). For UK tax purposes residence and domicile are generally defined as follows.
full details on http://www.ailo.org/common/externalPage.asp?intURL=/publications/default.asp&extURL=/downloads/UK_Expat_Retired.pdf
QROPS Advice: Taxation of ‘Non-Residents’ Living in Portugal
The basis for taxation in Portugal is determined by an individual’s residential status. Non-residents are liable to Portuguese tax on Portuguese source income, and non-residents receiving employment income from a Portuguese employer are subject to a
withholding tax of 20%.
Capital gains earned by non-residents are generally fully taxable at a flat rate of 25%, with an exception with respect to capital gains on the disposal of shares, which are taxed at 10%. Furthermore, if the shares are held for more than twelve months, the related capital gain will be exempt to taxation in Portugal as mentioned above. However, if the assets of the company to which the shares relate are composed of 50% or more of property located in Portugal the tax rate is 10%, regardless of the duration for which the assets are held.
Rental income earned by non-residents is taxed at a flat rate of 15% and there are no deductions available.
Non-residents who reside in a country with a low tax regime may be subject to higher rates of tax in respect of property transfers and may be subject to tax on deemed income from property.
full details on http://www.ailo.org/common/externalPage.asp?intURL=/publications/default.asp&extURL=/downloads/Portugal_2009.pdf
withholding tax of 20%.
Capital gains earned by non-residents are generally fully taxable at a flat rate of 25%, with an exception with respect to capital gains on the disposal of shares, which are taxed at 10%. Furthermore, if the shares are held for more than twelve months, the related capital gain will be exempt to taxation in Portugal as mentioned above. However, if the assets of the company to which the shares relate are composed of 50% or more of property located in Portugal the tax rate is 10%, regardless of the duration for which the assets are held.
Rental income earned by non-residents is taxed at a flat rate of 15% and there are no deductions available.
Non-residents who reside in a country with a low tax regime may be subject to higher rates of tax in respect of property transfers and may be subject to tax on deemed income from property.
full details on http://www.ailo.org/common/externalPage.asp?intURL=/publications/default.asp&extURL=/downloads/Portugal_2009.pdf
Subscribe to:
Posts (Atom)
Posts
