Is Italy still territorial tax based?

[wellington]

Italy introduces a territorial system of taxation

www.withersworldwide.com

Some background.

Have a co/fund does macro investments/positions and avg return is about 100-1,500%, top end 15,000%. (exotic markets inc crypto)

This is internal (quant) - staff funds (we don't take outsiders).

Currently reside on an island (main base) and tax is tax free unless bring in income/salary within the same year.

Also pay tax in Swiss (Wealth Tax) non-resident/citizen.

Considered Caribbean - but bored of islands, considered middle east - but its void of culture, considered HK/SPG but not ideal for small kids - i've lived in all previously.

Not interested in US/Cad, Aus (Aus would welcome me).

Europe is where i'd prefer to go, kids boarding when relevant, can step away from the company, i can find something to do (garden) and spend 3-6 months of the year, rest sailing/asia.

But i want to pay as little taxes as possible without playing around with structures and headaches.

Basically draw a dividends every few years (macro) and live off.

 

[bigdaddyleon]

As far as I know, there should still be the regulation with the fixed tax of 100.000€/year

 

[JohnnyDoe]

That article is rubbish. It is not a territorial tax system but a lump sum (“flat tax”) taxation for foreign sourced income with other benefits such as no reporting requirements. It is valid for 15 years. It works well: one page filing, €100k payment by 30 June and that’s it.

 

[Konstanz]

That article is rubbish. It is not a territorial tax system but a lump sum (“flat tax”) taxation for foreign sourced income with other benefits such as no reporting requirements. It is valid for 15 years. It works well: one page filing, €100k payment by 30 June and that’s it.

I read somewhere that if you get money from "black listed" countries like Bahamas, BVI etc, you will still be liable of tax as it be local.
Such programs usually have hidden things behind.

 

[Praetorian]

I read somewhere that if you get money from "black listed" countries like Bahamas, BVI etc, you will still be liable of tax as it be local.
Such programs usually have hidden things behind.

There's many work arounds for that and the italian tax authority doesn't have time or resources to dig through the trails. If you play ball and file accordingly and don't give them reasons to investigate you they won't care about what schemes you're using. I worked with many people who had money from offshore entities and found ways to funnel them back to Italy with little hassle. A disorganized government has its perks, it's not the IRS, french tax authority or HMRC.

 

[JohnnyDoe]

I read somewhere that if you get money from "black listed" countries like Bahamas, BVI etc, you will still be liable of tax as it be local.
Such programs usually have hidden things behind.

The lump sum covers all your worldwide earnings, from any country. There are no “hidden things behind”.

There's many work arounds for that and the italian tax authority doesn't have time or resources to dig through the trails.

They do.
Italian fiscal army: Guardia di Finanza - Wikipedia (60,000 soldiers - yes, they are technically such)
Revenue agency: Agenzia delle Entrate - Home (34,000 employees)
Prosecutors: Pubblico ministero (ordinamento italiano) - Wikipedia (10,000)

So there are over 100,000 highly trained professionals dedicated to investigate tax issues and financial crimes. Don’t underestimate them.

If you play ball and file accordingly and don't give them reasons to investigate you they won't care about what schemes you're using.

They routinely investigate also those situations that appear as plain vanilla. Often they investigate them even deeper because they might seem too good to be true.

I worked with many people who had money from offshore entities and found ways to funnel them back to Italy with little hassle. A disorganized government has its perks, it's not the IRS, french tax authority or HMRC.

Don’t play smartass with Italian tax authorities.

 

[Martin Everson]

The program is garbage. You need to declare all your sources of income upfront with the program. Those sources you have not declared are subject to tax (DTA's can be applicable however). It's quite a hostile program in reality. I was told years ago when I looked into it to place assets outside of CRS as accounts or income held in countries I have not declared would cause problems with Italian taxman. You are best to get an advance ruling in writing before going near this program.

Btw Greece has the same program.

Greek “non-dom” Tax Regime | Andersen in Greece

Alternative taxation for foreign individuals transferring their tax residency in Greece according to art.5A law 4172/2013 (effective from 12.12.2019)

gr.andersen.com

 

[JohnnyDoe]

The program is garbage. You need to declare all your sources of income upfront with the program. Those sources you have not declared are subject to tax (DTA's can be applicable however). It's quite a hostile program in reality. I was told years ago when I looked into it to place assets outside of CRS as accounts or income held in countries I have not declared would cause problems with Italian taxman.

Completely false. You were not advised well.
You don’t have to declare any source of income at all. Nor any assets, bank accounts etc. You only declare what you do/own in Italy, and pay standard taxes on that.

You are best to get an advance ruling in writing before going near this program.

It was compulsory at the beginning, now it’s not but it is advised to obtain it. It shouldn’t take more than a month.

 

[Martin Everson]

Completely false. You were not advised well.
You don’t have to declare any source of income at all. Nor any assets, bank accounts etc. You only declare what you do/own in Italy, and pay standard taxes on that.

Your not informed well or maybe didn't bothered to go through the program. When you go through the program you cherry pick where your source of income countries are from outside Italy. Why?? Because you can elect to exclude certain countries where you can qualify for a foreign tax credit in Italy and be able to claim treaty benefits between Italy and the source country.

It was compulsory at the beginning, now it’s not but it is advised to obtain it. It shouldn’t take more than a month.

Do not go through this program without an advanced ruling. You would be gambling with your wealth with Italian taxman.

 

[JohnnyDoe]

Your not informed well or maybe didn't bothered to go through the program. When you go through the program you cherry pick where your source of income countries are from outside Italy. Why?? Because you can elect to exclude certain countries where you can qualify for a foreign tax credit in Italy and be able to claim treaty benefits between Italy and the source country.

Yes this can be done but it has nothing to do with the scope of the program.

Do not go through this program without an advanced ruling. You would be gambling with your wealth with Italian taxman.

I subscribed the program since 2017, have obtained an initial ruling for being accepted and have passed 2 formal investigations. I know what I am talking about.
I have never had to declare any source of income.
I suggest that you change your Italian tax advisor.

This is a very good program, and not widely advertised, which is a plus. It is not a gamble at all.

 

[Martin Everson]

I subscribed the program since 2017, have obtained an initial ruling for being accepted and have passed 2 formal investigations. I know what I am talking about.
I have never had to declare any source of income.

lol.....I believe every word your saying.

 

[JohnnyDoe]

lol.....I believe every word your saying.

Not my problem. If you want the contact of my Italian accountant for receiving advice PM me.

For your viewing pleasure, my last Italian tax return:

 

[wellington]

I know someone living in Santorini that defrauded my co out of 150,000$ that doesn't pay tax and has seemingly never paid tax lol, so i doubt the Greeks really dig in too deeply.

Having said that, I don't mind paying tax (I don't like the idea of paying 100k a year though when not earning anything), I don't want to structure anything.

But like mentioned my Co/Fund invests over multiple years so my income is usually one large sum in one year, and then nothing for a few years.

Ergo, I spend money today i earned in 2019 which was built up from 2014-2019.
One could argue i could live in a tax haven for the period i will get my next dividends, but then that doesn't sit well with the tax man in Europe (i am certain) where as current is ok as its territorial tax based (here).

The program is garbage. You need to declare all your sources of income upfront with the program. Those sources you have not declared are subject to tax (DTA's can be applicable however). It's quite a hostile program in reality. I was told years ago when I looked into it to place assets outside of CRS as accounts or income held in countries I have not declared would cause problems with Italian taxman. You are best to get an advance ruling in writing before going near this program.

Btw Greece has the same program.

Greek “non-dom” Tax Regime | Andersen in Greece

Alternative taxation for foreign individuals transferring their tax residency in Greece according to art.5A law 4172/2013 (effective from 12.12.2019)

gr.andersen.com

 

[JohnnyDoe]

I know someone living in Santorini that defrauded my co out of 150,000$ that doesn't pay tax and has seemingly never paid tax lol, so i doubt the Greeks really dig in too deeply.

Having said that, I don't mind paying tax, I don't want to structure anything.

But like mentioned my Co/Fund invests over multiple years so my income is usually one large sum in one year, and then nothing for a few years.

Ergo, I spend money today i earned in 2019 which was built up from 2014-2019.
One could argue i could live in a tax haven for the period i will get my next dividends, but then that doesn't sit well with the tax man in Europe (i am certain) where as current is ok as its territorial tax based (here).

If you like the idea of living/paying taxes in Italy, contact a proper Italian advisor, don’t rely on the misinformation from @Martin Everson
The Italian program seems to be a good option for you.

 

[wellington]

You don’t have to declare any source of income at al

Kinda like Swiss Wealth Tax, they (the accountant) just put a figure in and it never changed.

 

[JohnnyDoe]

Kinda like Swiss Wealth Tax, they (the accountant) just put a figure in and it never changed.

It is quite different actually, much cheaper and simpler.
The accountant doesn’t put any figure at all in the returns. It is a simple one pager, where you just indicate the €100k due.

 

[Martin Everson]

Europe is where i'd prefer to go, kids boarding when relevant, can step away from the company, i can find something to do (garden) and spend 3-6 months of the year, rest sailing/asia.

But i want to pay as little taxes as possible without playing around with structures and headaches.

To return to your initial point seems your putting lifestyle first which is more important in the end. But the Italian program is hot garbage. I would not bother with Italian program and save yourself 100k.


P.S My signature is very clear

 

[JohnnyDoe]

No doubt that Italy is a nice playground. Plenty of things to do, not only gardening. @Martin Everson might argue that Italy is a dull place, but you should better Google “what to do in Italy”

 

[Martin Everson]

Quite the opposite actually Italy is a nice place to visit in my opinion. Best part of visiting Italy is you get to leave afterwards.

Anyway lets stick to topic. Italy still does operate an expensive territorial tax system to answer topic subject.

 

[lacomaco]

Why choose Italy and pay the €100k while you can get residency in Malta and under the non-dom you pay €5k min. tax only? Furthermore you can any time take the ferry and go to Italy for some weeks as a tourist...