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EXPAT TAX REGIME

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Expat Tax Regime

An “expat desk” provided by an accounting firm is a specialized service that supports expatriates and their families with tax, administrative, and accounting issues when they move to a foreign country for work reasons. These services are designed to facilitate the adaptation of expatriate professionals and their families in a new tax and regulatory context, providing advice and support for a range of complex tax and accounting issues.

Checklist Expat Regime "impatriates" 2024
Checklist Expat Regime "impatriates" 2024

International tax planning

Provides advice and assistance in tax planning for expatriates, including information on international tax regimes, bilateral tax conventions, and strategies to minimize the tax impact on income and assets in multiple countries.

Cross-border tax compliance

It provides support in managing tax compliance in multiple jurisdictions, including the filing of tax returns, the management of tax obligations, and compliance with local and international tax regulations.

Support in managing bureaucratic procedures

It provides assistance with bureaucratic and administrative procedures, such as obtaining visas, work permits, and other necessary authorizations to live and work legally in the host country.

Culture envorvment

We provide detailed information about the culture, traditions, social norms, and local customs in the new country, in order to facilitate adaptation and avoid possible cultural misunderstandings.

Assistance opening a bank account

We provide support in opening a local bank account to efficiently manage financial matters and monetary transactions in the host country like tax, statutory fees and so on.

SPID “digital entity”

We provide support in registering for the SPID system "digital entity" mandatory in Italy, guiding users through the necessary steps and providing assistance in case of problems or questions during the process.

Social Security

We provide information and advice on social security schemes, social security contributions, Italian pension plans, and other aspects related to social security for expatriates and inpatriates.

Consulting for the financial situation

Offers consulting in Italy and assistance for expatriates, including the management of investments, cross-border financial activities, and succession issues in multiple jurisdictions.

Management of international financial transactions

We provide support in managing cross-border financial transactions, including the assessment of the tax and financial implications of such transactions and the management of associated risks.

Partner Legal Consultancy

With our partners, we offer legal advice on international commercial and contractual matters, including the review and drafting of international contracts, the handling of cross-border legal issues, and the resolution of international disputes.

Italy offers attractive tax incentives for expatriates returning to the country, with significant changes implemented in 2024. The “Regime Impatriati” provides substantial tax benefits for both employees and self-employed professionals. Let’s explore the 2024 regulations and provide practical examples of potential tax savings, including advance payments for INPS and IRPEF.

2024 Regime Impatriati Overview:

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    – Tax Relief: 50% reduction in taxable income for qualifying individuals

    – Duration: Applicable for 5 tax years

    – Income Cap: Benefits apply to annual income up to €600,000

    – INPS Reduction: 50% reduction in the taxable base for INPS contributions (for self-employed professionals under the Impatriati regime)

    Practical Examples

    Let’s consider an annual income of €100,000 and compare different scenarios:

    1. Impatriati Regime for Self-Employed Professional

    – Taxable Income: €50,000 (50% of €100,000)

    – IRPEF Calculation:

    – INPS Contributions: 26.07% of €50,000 (50% reduction) = €13,035

    – Total Tax Liability: €14,400 (IRPEF) + €13,035 (INPS) = €27,435

    Advance Payments:

    IRPEF: 100% of previous year’s liability, paid in two installments:

    INPS: Typically paid in 4 installments (February, May, August, November), each around €3,259

    1. Regime Forfettario (15% rate)

    – Taxable Income: €78,000 (78% coefficient of €100,000)

    – Flat Tax: 15% of €78,000 = €11,700

    – INPS Contributions: 26.07% of €78,000 = €20,334.60

    – Total Tax Liability: €11,700 (Flat Tax) + €20,334.60 (INPS) = €32,034.60

    Advance Payments:

    – Flat Tax: 100% of previous year’s liability, paid in two installments:

    – INPS: Typically paid in 4 installments (February, May, August, November), each around €5,084

    1. Regime Forfettario (5% rate for new activities)

    – Taxable Income: €78,000 (78% coefficient of €100,000)

    – Flat Tax: 5% of €78,000 = €3,900

    – INPS Contributions: 26.07% of €78,000 = €20,334.60

    – Total Tax Liability: €3,900 (Flat Tax) + €20,334.60 (INPS) = €24,234.60

    Key Observations

    1. The Impatriati regime significantly reduces both IRPEF and INPS liabilities by halving the taxable income.
    2. For self-employed professionals, the Impatriati regime offers a substantial INPS reduction, applying the 26.07% rate to only half of the income.
    3. The Regime Forfettario at 5% provides the lowest overall tax burden for eligible new activities but doesn’t offer INPS reductions.
    4. Advance payments for both IRPEF and INPS should be carefully planned to avoid cash flow issues.

    These incentives make returning to Italy financially attractive for expatriates by substantially reducing their tax burden. The Impatriati regime is particularly beneficial for high-income earners due to the significant reductions in both IRPEF and INPS contributions. However, it’s crucial to consider the advance payment obligations when planning finances throughout the year. For those considering relocation, it’s essential to consult with a tax professional to determine the most advantageous option based on specific situations and to ensure compliance with all eligibility requirements and obligations, including proper management of advance payments.

    Specialized Support for Expatriates Our Firm of Chartered Accountants provides specialized expertise to help expatriates navigate the unique tax and accounting challenges they may face while working and living in a foreign country. Comprehensive Services

    • Tax Management: We assist expatriates in understanding and managing their tax obligations, ensuring compliance with both local and international tax laws. This includes filing tax returns, understanding tax treaties, and optimizing tax liabilities.
    • Accounting Solutions: Our team offers tailored accounting services to help expatriates maintain accurate financial records. We provide guidance on currency exchange impacts, financial reporting standards, and bookkeeping practices suitable for international contexts.
    • Financial Planning: We support expatriates in planning their finances effectively, taking into account factors such as retirement planning, investment strategies, and estate planning in a global setting.
    • Regulatory Compliance: Staying compliant with the various regulatory requirements of different countries can be daunting. Our firm ensures that expatriates adhere to all necessary regulations, reducing the risk of legal issues.

    Benefits of Our Services By leveraging our expertise, expatriates can effectively manage their financial and tax matters, allowing them to focus on their professional and personal endeavors without the stress of complex international financial regulations. Our services are designed to provide peace of mind and financial clarity in an ever-changing global environment.

    Thanks to our Firm of Chartered Accountants, we offer specialized expertise to address the unique tax and accounting challenges that expatriates may encounter during their work and residence in a foreign country. These services help expatriates effectively manage their financial and tax matters in a complex international context.