Italy

Taxable period

The tax year for individuals in Italy is the calendar year.

Tax returns

Taxpayers may file either Modello Redditi PF or Modello 730, depending on their personal situation.

Generally, Modello 730 is filed by individuals who have an Italian withholding agent.

Modello 730

Modello 730 is a simplified income tax return.

It may be filed only for specific income types, generally income subject to ordinary taxation, and the taxpayer must meet the following conditions:

• the individual is Italian tax resident in the year of filing and in the previous year;
• the individual has a withholding agent in Italy during the filing period;
• the individual has no VAT number.

The main advantage of Modello 730 is that the taxpayer is not required to prepare tax calculations.

The balance resulting from the tax return is directly withheld or refunded through the Italian payslip.

Married couples may file Modello 730 jointly.

This tax return must be submitted to the Italian tax authorities by 30 September via electronic filing.

Modello Redditi PF

If Modello 730 is not applicable, the taxpayer must file the Italian tax return called Modello Redditi PF.

This tax return must be submitted to the Italian tax authorities by 31 October via electronic filing.

Married couples cannot file Modello Redditi PF jointly.

Payment of taxes is due on a self-assessment basis.

If the tax return results in a credit, the amount will be refunded directly by the Italian tax authorities.

Withholding tax and Modello CU issued by the employer

On employment income, the employer, acting as withholding agent, applies monthly withholding tax based on the tax rates applicable to annual employment income.

The employer must issue, by 16 March of the following year, an annual employment certification, called Modello CU, certifying the taxable income and withholding taxes applied during the fiscal year.

If a foreign individual has an employment relationship with an Italian company, the Italian employer, as withholding agent, must comply with the above obligations.

If a foreign individual has no employment relationship with an Italian company, the individual is required to declare the income in the Italian tax return under the self-assessment method.

Tax Payment

Income taxes are paid through the individual tax return using the self-assessment method as follows:

• two advance payments, due on 30 June and 30 November of the current year;
• one final tax balance, due on 30 June of the following year.

The following payments are due:

• first advance payment: 40% of 100% of the income tax balance of the previous year;
• second advance payment: 60% of 100% of the income tax balance of the previous year.

Tax advances are used to offset the tax balance of the following year.

Starting from 1 July 2024, payment forms including credits used to offset tax liabilities must be electronically filed through the online services of the Italian tax authorities.

Tax audit process

The tax authorities have the power to audit a taxpayer’s return until 31 December of the fifth year following the year in which the tax return was filed.

In case of an omitted tax return, the tax authorities may assess the taxpayer until 31 December of the seventh year following the year in which the tax return should have been filed.

The taxpayer may appeal against a notice of assessment within the applicable deadline, generally 30 or 60 days from the notification date, depending on the relevant procedure.

Topics of focus for tax authorities

The main areas of focus for the Italian tax authority are:

• assessment of foreign tax credits;
• assessment of the tax residence of Italian citizens who moved their tax residence abroad;
• assessment of the requirements to benefit from special tax regimes;
• financial monitoring obligations;
• use and application of tax credits and incentives.

Final note: This final consolidated version is prepared for general guidance only and does not constitute professional advice. Specific advice should be obtained before taking any action based on the information contained herein.