Tag Archives: Italian taxes

Taxing Times

05 Tuesday Jun 2012

Posted by in Italian bureaucracy, Taxes in Italy, Uncategorized

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Just when we think we’re finally getting a handle on the ins-and-outs of Italian bureaucracy, Italian bureaucracy throws us a curve ball. This year it is the in the form of two new taxes.

Well, actually one re-instated tax and one new tax.

The reinstated tax used to be call l’ICI, and it was a modest tax on one’s real estate holdings in Italy. Several years ago then Prime Minister Silvio Berlusconi abolished the tax in an effort to appease voters and gain re-election, in which endeavor he succeeded. If you have been following events in Italy, you know she is in deep financial crisis, and that the new Prime Minister, Mario Monti, is a technocrat.  ” Technically (no pun intended), a technocratic government is one in which the ministers are not career politicians; in fact, in some cases they may not even be members of political parties at all. They are instead supposed to be “experts” in the fields of their respective ministries.” (For a more in-depth explanation of a technocracy, read this article by Joshua A. Tucker, writing for ‘Aljazeera,’ from which the preceding quote is taken.)  Monti has been given the unenviable task of ‘fixing’ the Italian economy, and one of his steps has been to reinstate the ICI, now known as the IMU  (Imposta Municipale Unificata).  It is pronounced exactly as below.

Photo courtesy of http://www.mdahlem.net

Figuring out what one owes for the IMU is not terribly difficult, fortunately. There is a handy-dandy website (Google IMU *your town’s name* to find it) that will tell you just what you owe, and will even print out the F24 form to use when paying it. The first payment is due June 18. The second payment is due in September if you are paying in three installments, or in December if you are paying in two. The tricky part is that part of the tax goes  to the federal government and part goes to municipalities. Rates for the later have not yet been set, and probably won’t be until August; so while you can figure out what you owe and need to pay for June, the second and third installments are still a bit of a mystery. The tax is only slightly higher than the old ICI for first homes. It is a good bit higher for second homes.

Speedy and I have no problem with this tax being stout-hearted believers in paying for civic services, even curtailed as they have become through the austerity measures.  We DO have a big problem with the second tax.

Ivy courtesy of sparkle-and-fadeaway.blogspot.it

The IVIE (Imposta sul valore degli immobili situati all’estero) is a tax on any real property owned in another country.  Designed to catch out the big fish who hide large assets overseas, this tax is sadly also netting all us little minnows.  It is not a particularly small tax either, as it is equal to 0.76% of the value of your property.  The tricky part here (aside from actually paying the damn thing) is knowing what the correct value of the overseas property is.  Fortunately in the U.S. we all have assessed values placed on our homes for tax purposes, so I suppose we could use them.  And one does get a limited amount of credit for real estate taxes paid to the locality of the property in question.

There is yet another tax which is sort of bundled in with the dreaded IVIE (dubbed ‘Poison IVIE’ by The Informer website which, by the way, I highly recommend to anyone living in Italy).  Strictly speaking it is not IVIE, but it feels like it – it is a tax on the value of any money, funds, pensions and so forth that you might have in another country.  For 2011 and 2012 it’s 0.10% of the value of said investments; in 2013 that goes up to 0.15%.  Probably by then no one will have any money left anyway, so never mind.

We understand the reasoning behind these IVIE taxes but they seem hideously unfair to an expatriate.  They are, once again, meant to catch big fish: the wealthy who have secreted their resources in foreign countries or off-shore safe havens, something rich Italians are famous for doing.  The penalties for not reporting/paying are extortionate – 10%-50% the value of the unreported assets.  Many of us “victims” of this tax wish the government huge success so as to alleviate the burden on us in the future.

It is ‘Poison IVIE’ indeed to those of us who are just trying to enjoy a quiet  expatriate life.  At some point Italy will ask just one thing too much of us; our backs will break.  We understand that we all have to do our bit to save the country, but taxing assets in our home country just isn’t right.  And don’t get any ideas, U.S.A. – don’t think you can start taxing our property here in Italy!

Passo Carrabile

05 Wednesday May 2010

Posted by in Italian bureaucracy, Italian habits and customs, Italy, Uncategorized

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photo courtesy of areablog.net

It’s silly season for Italian taxes.  In the last couple of weeks we’ve received the Rifiuti tax and the Passo Carrabile tax.  I don’t know why paying for garbage removal is a tax and not a service fee, but that’s what it is. (There’s been a nice lawsuit on this subject; it has resulted in eligibility for an IVA refund for rifiuti tax payers.  Read more about that here or in Elaborations on the right). The rifiuti tax costs about the same here as it used to cost us for a year of garbage pick-up at our home in Connecticut, roughly E350.  The difference, of course, is that in Connecticut the garbage man came to us; here we walk to the Cassonetto di Spazzatura (which, by the way, the Captain thinks is the most sonorous of Italian phrases).  This one we have no problem with because we are getting good service for our money (and yes, we do get good garbage pick-up service).

No, the one we have trouble with is the tax for our Passo Carrabile. It’s an Italian concept, handled as only the Italians would handle it.  ‘Passo Carrabile’, according to the Oxford web translator means ‘driveway,’ but it actually means any alley, drive or portal that must left accessible for the owners.  In other words, don’t park here, buster.

In the U.S. it seems common sense applies more often than not – if there’s a driveway, one knows not to park across its access to the road.  If there’s a store that needs access to get goods in and out, a simple ‘No Parking’ sign, available for not much money at any hardware store will do the trick.  Easy!

Well, you won’t be surprised to learn it’s a little more complicated here.

About three years ago we built, at no small expense, a small parcheggio on the side of the road above our house.  It was a complex project involving many permits, an engineered plan, checks by various officials during construction, new walls, etc.  In fact, the file I have for “Parcheggio” is three times thicker than the file called “House Reconstruction.”  Why the added fuss?  Because we were building something attached to a public road.  In our innocence we thought that The State would be thrilled with one less car parked on a narrow, crowded road.  And insofar as permits were forthcoming without much delay, evidently they were.

But, as the saying goes, No good deed goes unpunished; and we are punished every year for our parcheggio.  Because it opens directly on the road we are obliged to post Passo Carribile signs so that no one will park in the middle of the road.  Seems obvious to us that no one would, especially since cars park on the other side of the street, making it impossible for more than one vehicle to pass through at a time.  A car parked adjacent to our parcheggio might completely block the road.  However, we have access to the street, so we must pay the tax.  Apparently it is based on how many feet of opening you have on the street.  Because of the steep terrain here, our parcheggio runs horizontally along the road, not perpendicular to it.  We have a lot of street frontage, and we pay accordingly.  Last year the Captain went to the appropriate office and said, “We don’t want a Passo Carrabile,” but he was told that because we’re on a public way we are required to have one.  And what does it cost, you may ask?  About the same as it costs to have garbage service.

So every year we pay for making the street we live on incrementally safer and easier to transit.  Oh well.  Italy is a taxing kind of country, and this is the season of silly taxes; probably the tax collector is laughing all the way to the bank.

L’ICI

17 Monday Aug 2009

Posted by in Italian bureaucracy, Italy, Law and order, Rapallo, Uncategorized

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So, what did you think when you read the title ‘L’ICI?  Lice?  Itch?  Well, in a way both are correct, since  L’ICI (pronounced leach’-eee) has been a pesky little problem that’s been driving us nuts.

Rapallo coat of arms

The ICI (eetchy!) is Italy’s real estate tax.  We’ve always been thrilled at how small it is compared to what we’re accustomed to paying in the U.S., where such taxes generally pay for public education.  I’m not sure what the ICI pays for here – it is a tax imposed by the commune (the town), and is used for ‘services.’  It seems to me that we are already taxed for just about every service we receive (garbage, TV, etc.), but I digress.

When we first bought our house we went to the Tribute Office where such things are paid, and asked how much we owed.  Perish the thought that a taxing body should actually prepare and send a bill!  No.  It is up to the tax-payer to a) know that there is a tax due, b) know how much it is and c) know where, when and how to pay it.  Okay.  We can and have learned this stuff, and keep a careful calendar so we won’t miss any payments.  The trick we never mastered was knowing how much to pay, so each year we went to the office and they were nice enough to tell us.  Sort of.

Last year we received a certified letter that we had to pick up an important document at the Tribute.  It turned out that since 2002 we had been paying an incorrect amount, on two counts.  First, we were paying as if our house were still a rustico instead of a restructured habitation (in spite of the fact that our geometra filed the correct forms informing the commune of the change) and second, only the Captain’s share of the tax had been paid, and that was only half of what was owed.  So we owed in excess of E 800.  They were nice enough to understand that these were honest mistakes (and not just ours), so the accrued penalties and interest were set aside.  Grudgingly we paid – yet another unexpected and large expense.  We still don’t understand why the office didn’t give us the correct amounts due each year when we trudged in to ask.

L’ICI for primary homes was abolished beginning last year (thank you, Mr. Berlusconi), which means we no longer pay.  Only businesses and those who own more than one home now have to pay.  But the ICI wasn’t finished with us, not yet.  We received a note this year telling us that we had not paid for 2002.  We hauled out the many forms and receipts left over from last year’s adventure and discovered that in fact we had nothing to show we’d paid more than the original incorrect amount in 2002.  So back the Captain went to the Tribute Office, gathered all the materials and, once again, we will be making an unexpected tax payment.

We shouldn’t complain, I suppose.  It is still way, way less than Americans pay annually in property taxes.  It’s just the inefficiency of it all that drives us crazy.  They probably never would have cottoned to the errors if the tax on primary residence hadn’t been abolished, but now I guess the workers in the Tribute office have time on their hands.

This should be the end of our ICI Adventure, but you just never know in Italy.  These things have a strange way of being resurrected at the most inopportune times.