Tax obligations in Italy
In Italy, taxpayers must fulfill various tax obligations throughout the year, with deadlines and requirements differing based on the taxpayer category and applicable tax type. Notably, almost all tax returns and fiscal communications must be filed electronically.
Compliances relating to direct taxation
Taxpayers subject to IRPEF (individuals) and IRES (corporations) must submit an annual return to report their income and pay any due taxes. At the same time, they must make tax payments on account for the current year when preparing their tax return.
The tax return must be completed using a standard form approved by the tax authorities, updated yearly.
Individuals and partnerships must file their Italy tax return by the end of November following the relevant tax year. For limited liability companies, the tax declaration in Italy must be submitted within 11 months of the end of the tax period, which typically aligns with the company’s balance sheet date. Therefore, the corporate tax return due date is critical for these companies.
Tax payments are split into two installments during the tax year, with a final balance payable by the 30th day of the sixth month after the end of the tax period. This deadline can be extended to the 30th day of the seventh month by paying a 0.4% interest fee. It is important for taxpayers to know when to file taxes in Italy to avoid penalties and ensure compliance.
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).
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