29 Nov 2024
Do you know the tax policies of Italy for expats to send money to Nigeria from Italy? Every country has different tax policies for migrants. Italy is a developed country with numerous job opportunities. According to the statistics of 2021, 119,435 Nigerian immigrants reside in Italy. Due to more excellent job opportunities, significant currency value, and an enchanting lifestyle, Nigerians migrate to Italy to secure jobs and get a peaceful living. However, expats must learn about Italy's tax system.
Each country has different tax policies. It is the responsibility of every resident to pay the taxes on time. However, the tax policies of migrants are different. As they are connected with two countries at a time, it becomes difficult for them to manage their taxes. Considering the situation of a migrant, the embassy relieves the tax of one country, and the migrant has to pay tax in the country of stay. As a Nigerian, you must pay income tax, VAT, and residence tax ( if eligible). You must learn your eligibility for all these taxes to clear your dues. Let's have a closer look at the details of the Italian taxes:
Nigerian expats must know the tax implementation to make an effective budget, save money, and send money to Nigeria online from Italy. The following are the most common types of taxes that expats must learn:
As a Nigerian, firstly, you need to understand the double taxation agreement. It is a tax contract between countries. According to this contract, the expats must pay taxes in a single country to prevent additional tax payments in both countries. This implies that Nigerian expats will pay taxes in Italy as long as they stay there. So, Nigerians don't need to worry about the tax implications on their Nigerian assets as they have relief on Nigerian taxes.
Nigerian expats must learn about residency taxes in Italy. In Italy, there are two kinds of expats: tax residents and non-tax residents. The residency status depends upon the visa type and duration of the stay in Italy. If an expat stays in Italy for five years without leaving the country, they get permanent residency. Residency expats have to pay all the taxes like native Italians. Tax residents must pay 23—43% of their global income tax.
Non-tax residents are those expats who are not registered as residents in Italy. They have no record in Italian domiciles and are in Italy for a short stay. Such expats have to pay less taxes based on their income in Italy. Non-tax residents can save more money and look for the cheapest way to send money to Nigeria from Italy to help families. Non-tax residents have to pay taxes considering the following:
One of the common types of tax every migrant has to pay is income tax. It is a specific amount that depends on the expat's income. As a Nigerian, you must pay a particular portion of your annual income to the Italian government. It is based on your overall income resources in Italy, such as rental, investment, and business income.
Business income tax is for expats who start businesses in Italy. Whether you run a small or large business, you must pay taxes based on your profit.
Suppose you are self-employed, which means working as an entrepreneur or having a personal business. In that case, you must pay taxes, consider your profit, and eliminate the expenses or cost of investment. Self-employers pay less taxes than usual employees.
If you are a tax resident in Italy, you must pay taxes on your global investments. Often, expats send money to Nigeria from Italy for investments to grow their income. If you have invested money anywhere in the world and receive an annual profit, you must pay a specific tax. Even if you have invested money in buying property that you have rented, you are supposed to pay taxes.
Regional or municipal taxes are local taxes imposed by a country's regional and municipal governments to raise funds for public services. These taxes apply to the people of a specific area, considering the needs of the time. They are just there to improve the standard of living and resolve particular issues in an area.
VAT is a tax automatically added to the services and goods you buy in Italy. Although the standard VAT rate is 22, different VAT is added to different services and products.
Sending money home is a common practice of expats in Italy. Therefore, Nigerian expats must learn about remittance taxes. However, no specific government remittance taxes or policies exist, especially on outgoing remittances. However, expats need to pay taxes to remittance services or banks. Usually, banks charge higher taxes for sending remittances. You will also have a deduction of the amount from the receiver side. So, it is necessary to choose a remittance service carefully so you can save money.
Online remittance transfer services are affordable and cost-effective. They charge less fees than banks. As an expat, I choose the remittance services because some may be hidden or there may be additional charges. Use legal remittance services and clear your concerns about taxes. You can make an online money transfer from Italy to Nigeria using ACE Money Transfer. ACE is highly affordable and adds no taxes on sending remittances from Italy. You can also get convenient exchange rates by using ACE.
Tax plays a crucial role in the lives of expats. As expats have different native and living land, they are often confused about paying taxes. As a Nigerian, you must understand the dual tax agreement. According to the HS agreement, expats must pay taxes in their country. So, you don't need to worry about Nigerian taxes. However, if you have any arrears, you can clear them by sending money back home. The common types of taxes in Italy for expats include VAT and income tax. As an expat, first, you must verify your tax status, whether you are a resident or not, to identify imposed taxes.
As a Nigerian expat, you must find your residency status. In Italy, non-residents and residents have different tax policies. Residents are those individuals who have domicile in Italy and are registered citizens. However, if expats are for short stays in Italy, they are considered non-tax residents. Non-tax residents only have to pay income tax and VAT. Income tax depends upon your salary. You must pay the Italian government a specific percentage of our annual income.
Tax-resident expats in Italy must pay various types of tax, such as residency tax for their accommodation, income tax, regional or municipal tax, VAT, and investment tax. As a tax-resident expat, you must pay taxes based on your global income. You must pay taxes if you have a business, have rental properties, or make an instant money transfer from Italy to Nigeria to make investments. Self-employed entrepreneurs and people in business also have to pay taxes based on their income. Learning about the taxes will help you prevent heavy penalties and fines.
Tax policies in Italy depend on whether an expat is a tax resident or a non-resident. If an expat is a tax resident, he must pay taxes on his global income, business, and assets. However, a non-resident must only pay taxes on Italian incomes, profits, and assets.
Individuals who have domicile and citizenship in Italy are tax residents. However, individuals who stay in Italy for a short period are not tax residents, meaning they don't hold permanent residency.
The Italian government does not charge money for sending to Nigeria. However, banks may charge a tax for sending remittances. Taxes are commonly applied on the receiving side.
Online methods are the most affordable way of sending remittances. You can make affordable transactions using mobile apps and digital wallets. ACE Money Transfer is highly affordable for sending money to Nigeria from Italy.
Exchange rates can be calculated using Google Currency Calculator or by visiting the ACE Money Transfer website, entering the currency, and getting the most updated exchange rates.
