Tax obligations in Italy

Throughout the year, the taxpayer is required to comply with a series of obligations that vary, by type and by date, depending on the category of taxpayer and the type of tax that applies. It is important to note that almost all tax returns and fiscal communications must be sent by electronic filing only.

Compliances relating to direct taxation

Both IRPEF and IRES taxpayers must complete an annual return to self-assess and pay taxes in full for the applicable tax year, and make tax payments on account for the current year at the time the return is prepared.

The tax return must be drawn up using a standard form approved by the tax authorities on a yearly basis.

Individuals and partnerships must file an annual tax return by the end of November of the following tax year. Limited liability companies must file the tax return within 11 months of the end of the relevant tax period, usually matching the balance sheet date. This means that the Italy corporate tax return due date for these companies is crucial.

Tax payments are divided into two payments on account payable during the tax year, and a balance to be paid at the same time as the first payment on account is due for the following year. This is the 30th day of the sixth month following the end of the relevant tax period, with the option to postpone to the 30th day of the seventh month by paying 0.4% interest.

Discover more about deducibility of interests payable

IRAP

For IRAP purposes, an annual return has to be drawn up and submitted by the same deadline as the IRES return.

VAT

An annual Value Added Tax return relating to a calendar year must also be filed, before the end of April of the following tax year: it must contain the total of incoming and outgoing operations, tax due, deductions, payments made, tax due as settlement or difference as credit. In general, settlement is affected on a monthly, quarterly or infra-yearly basis. Taxpayers who must make monthly payments must pay any amounts by the 16th day of the month following the one to which the settlement relates or, in the case of quarterly settlement, by the 16th day of the second month following the end of the quarter. For the last yearly quarter, the payment deadline is 16th March. All credits will be deducted from the settlement in the following month or quarter. By 27th December, the taxpayer is asked to provide a payment on account as the last settlement of the year.

Off setting

It is possible to offset credits and debits relating to the same tax (traditional offsetting) or credits and debits deriving from different taxes and social security contributions (horizontal offsetting).

Contact us for more information about tax obligations in Italy.

 

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