15 Aug 2024
Understanding your tax obligations can be complex. Taxation is one of the most complicated matters within the financial realm. It gains more importance when you are traveling to Italy to work and earn a living. Over 22,000 Gambians work in Italy. They earn a living and send money to Gambia online from Italy to offer financial support back home.
Developed countries are concerned about taxation matters. Italy is no exception. A significant portion of developed economies rests on taxation. Therefore, understanding your tax obligations while travelling to Italy from Gambia is important which this blog attempts to address and help you understand.
Taxation in Italy is progressive. Government departments in the country are mandated to collect due taxes and even penalize tax evaders. However, the incidence of tax evasion in Italy is less. The reason? The taxes collected are fairly and generously spent on the welfare of the people. Basic life amenities are available to all without any discrimination. These amenities are:
· Healthcare
· Education
· Food
· Shelter
· Equal employment opportunities
· Welfare programs
It is one of the reasons that a majority of Italian residents pay their taxes happily. The fact that the country has a robust economy proves that the government has a progressive and strong tax system in place. Taxation applies to you even if you are traveling to Italy from Gambia as an expatriate. Therefore, you need to understand the taxation landscape of Italy, even if you are going there as a Gambian migrant, to earn a living so that you can send money online to Gambia from Italy to offer financial support back home.
The Italian tax regime levies income taxes on non-residents or migrants. If you, however, spend six months or (183 days) in the country, you will be considered a resident of the country and taxed, therefore, accordingly.
Income tax slabs in Italy, however, vary greatly. Different income slabs are taxed differently. The income taxes range between 23% and 43%, with the lowest rate applicable to income under €15,000 and the highest rate applicable to incomes above €50,000. Take a look below.
Income tax is a kind of tax that applies to everyone with an income. But the only condition for these taxes to be applied is that your income has to reach a certain level to be taxed. If it remains below that level, your income will likely be exempt from being taxed.
But apart from the income tax, the country applies regional tax that ranges from 0.9% to 1.4% and a small local tax ranging from 0.1% to 0.8% of your gross income. As a Gambian migrant, you will also be taxed if your income falls in the following few categories.
· Income between €0 to €15,000 – 23%
· Income between €15,000 to €28,000 – 25%
· Income between €28,000 to €50,000 – 35%
· Income between €50,000 to above – 43%
Therefore, remember that as a Gambian in Italy, if your income falls between the above-mentioned income ranges, you will have to pay the required tax amount. Also, keep in mind that this tax is other than the tax you have to pay on your money transfer from Italy to Gambia.
Despite having a progressive tax regime, the government of Italy seeks to help expatriates who are willing to come to Italy for work. The government recently introduced the New Inpatriate Tax Regime. It is a bill seeking to help skilled expatriate workers with the Italian tax system.
According to this bill, the tax system is simplified for professionals and business owners moving to Italy. It is also known as reshoring. It offers a straight 50% to 60% tax exemption on incomes earned through skills and businesses of up to €600,000, previously done in a non-EU country.
This bill comes into effect from January 2024 and reduces tax from 50% to 60% of your income if you are a new arrival in Italy. A worker will have to prove that they do not have any tax residency in Italy for at least 3 preceding years. Moreover, they will have to declare that they will continue to stay tax residents in Italy for at least four consecutive tax years. However, they will be required to pay back their tax savings should they choose to leave early.
While you have a fair idea about the Italian tax system by now, do you know where to work in Italy as a Gambian migrant? Click HERE to get the answer, lest you get confused by the multiple employment opportunities the robust Italian economy offers you.
All the taxes are filed electronically in Italy. But there are two different tax returns in Italy. Which one you qualify for largely depends on your situation. The residents who have lived in Italy for two consecutive years, and have worked, are working for an IT employer are required to use the 730 Form. It is a simplified form that comes with most of your details already filled.
It is downloadable from the official website of the Italian Tax Authority. While using this form, remember that you are not required to mention any changes to your income unless a significant change has occurred like purchasing a house or property. The filing deadline is July 23 and the end of tax season is December.
The second form, however, is called the Modello Redditi. It will include employment income, tax withheld, capital gains, foreign income, and other sources of income of a resident. When it comes to this type of tax return, always remember that you will have to file these tax returns by the 30th of November of the current fiscal year for the previous year.
For example, if your annual income in 2022 was €40,000, you will have to declare that your annual income was €40,000 while filing your tax returns in 2023. It has to be regardless of any increase or decrease in your income and earnings.
If you look closely at the Italian tax system, you will realise that the country is pretty particular about collecting taxes from whoever taxes apply to. The rates seem high too. But then these taxes are used for the welfare of the people including migrants. The Italian government also ensures the equitable distribution of wealth collected through taxation.
Although taxation in Italy is progressive and transparent, you must thoroughly understand it lest you end up paying double taxes unnecessarily. Remember that when you send money to Gambia from Italy, taxes will still be applied.
But these taxes are a meager amount yet can spike. It depends on a) which online money transfer service provider you choose and b) the quantum of money you send back home to Gambia.
Therefore, to escape the financial impact of the taxes coupled with fees, you must choose a remittance service provider that not only charges you a low fee but also offers you live and market-competitive currency exchange rates. These flexible rates will protect you from the financial impact of the taxes and fees you pay for your transactions.
The Italian taxation system is progressive and transparent. It stands mainly on income tax and the General Sales Tax (GST). The government in Italy collects taxes through certain offices and government officials and then the collected revenue is spent on the welfare of the people in Italy including the migrants.
Yes. The Italian tax system benefits migrants. If a migrant is a professional or a business owner and moves to Italy, they will get a tax exemption of up to 50% to 60% on their incomes should their incomes, or profit, in case it is a business, reach or exceed €600,000. This is what the Italian government has done as a result of a recent bill called the New Inpatriate Tax Regime.
The income tax slabs in Italy vary greatly, depending on your income. Remember that the rate of tax is directly proportional to your income. For example, tax is 23% on income between €0 to €15,000; 25% on income between €15,000 to €28,000; 35% on income between €28,000 to €50,000; and 43% on income from €50,000 and above.
Yes. Filing your tax returns in Italy is plain and easy. But tax returns are of two types. One is filed on Form 730 in case you are working for two years for any IT employer. It can be downloaded from the Italian Tax Authority Website. The other is called Medello Redditi. It includes employment income, tax withheld, capital gains, foreign income, and so on.
You can easily escape the financial impact of paying taxes on your online money transfer service provider if you choose your service provider with care. Always remember to choose a service provider that charges you low fees in addition to offering live and market-competitive currency exchange rates. These rates will likely compensate you financially for the fees and the taxes you pay on your international money transfers.
