Foreign Income
We provide specialised assistance for income produced abroad, both property and financial income, with correct application of international tax conventions.
Service details
The management of foreign-source income is one of the most complex areas of taxation, where Italian law intersects with the laws of other countries and international conventions against double taxation. Studio CITI snc offers specialised assistance for all types of foreign income relevant to Italian tax residents.
The main types of foreign-source income managed by the firm include: property income from foreign real estate (buildings and land located outside Italy), capital income such as foreign-source dividends and interest, income from employment or self-employment carried out abroad, income from participation in foreign companies, and miscellaneous income such as capital gains from the disposal of foreign interests.
Italian tax residents are taxed on income produced anywhere in the world (worldwide taxation principle). However, bilateral conventions against double taxation (concluded by Italy with over 100 countries) establish which state has the right to tax income and provide for exemption or tax credit mechanisms to avoid double taxation. The firm analyses the applicable convention on a case-by-case basis.
For those holding investments or bank accounts abroad, tax monitoring is essential: the obligation to complete section RW of the income tax return and the payment of IVIE (on property) and IVAFE (on financial assets). Failure to comply with these obligations is penalised at very high rates on the undeclared value.
Frequently asked questions
I have a bank account in Switzerland: do I need to declare it in Italy? +
Yes. Italian tax residents must declare in section RW of their income tax return all investments and financial assets held abroad, including bank accounts, regardless of the amount. Omission incurs penalties of between 3% and 15% of the undeclared value (doubled for blacklisted countries). The firm correctly manages this section of the return.
I own an apartment in France: how is it taxed in Italy? +
Under the double taxation convention between Italy and France, property is generally taxed in the country where it is located (France). In Italy, the income from the foreign property must still be indicated in section RL of the income tax return. IVIE (Tax on the Value of Foreign Real Estate) is also payable at a rate of 0.76% on the cadastral or purchase value. Taxes paid in France give entitlement to a tax credit in Italy.
I work in Germany but am resident in Italy: where do I pay taxes? +
The answer depends on the frequency and duration of work in Germany. If you work permanently in Germany as an employee, the Italy-Germany convention generally provides for taxation in the country where the work is performed (Germany). However, being resident in Italy, you must also declare the foreign income in the Italian Redditi Model and claim a credit for taxes paid in Germany. The firm analyses the specific situation and advises you on the correct declaration method.
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