# delaration of overseas earnings in Italy



## philotalian (Nov 10, 2014)

Hello, 
I have been a resident for over a year through setting up a VAT and submitting a tax return. However, I have decided that I am not going to live in Italy anymore and have submitted the cancellation of VAT with my accountant. 

My question is about the technical definition of my income. I make all my income through consultations over the internet from people outside of Italy, from my website hosted in another country. The earnings went through my US Paypal account to my US bank account. I would do regular transfer of funds for living, to my Italian bank account from the US. I also bought an Italian registered vehicle with those earnings. (Can that be classifed as an expense?)

Technically then, have I been earning money in Italy? All I have been doing is fulfilling the consultations whilst in Italy, but the work has been with clients in other countries. With my first tax return I declared some of this income because it was only a couple of months. Now with the second and final tax return, I am wondering how much I am obliged to declare?

thanks!


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## BBCWatcher (Dec 28, 2012)

Practically every country, including Italy, follows these basic tax principles:

1. Work is where you perform it, not how long the wire or wireless connection is. (Or even how long the telegraph wires were if you performed your work in the 1800s via Morse Code.) This should be quite easy to understand. If you call your credit card company from London Heathrow Airport, is the call center employee you're talking to in the Philippines working at Heathrow Airport? No.

2. Income is income, regardless of where or how you were paid. Even if you were paid in bags of corn left at your vacation home in Malaysia.


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## philotalian (Nov 10, 2014)

BBCWatcher said:


> Practically every country, including Italy, follows these basic tax principles:
> 
> 1. Work is where you perform it, not how long the wire or wireless connection is. (Or even how long the telegraph wires were if you performed your work in the 1800s via Morse Code.) This should be quite easy to understand. If you call your credit card company from London Heathrow Airport, is the call center employee you're talking to in the Philippines working at Heathrow Airport? No.
> 
> 2. Income is income, regardless of where or how you were paid. Even if you were paid in bags of corn left at your vacation home in Malaysia.


Many thanks for your clarification!


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## philotalian (Nov 10, 2014)

Lifeinitaly-it said:


> If you have an accountant in Italy, he will explain to you, that a person who has a residence in Italy, and produces income, living in Italy, he has to pay taxes in Italy -
> 
> Then, if you sell something or simply a service, even to customers on the moon but living in Italy, how can you not have a VAT ?
> 
> The car, according to Italian tax law, is deductible from income, in certain percentages, by people who have a VAT, and registration at the Chamber of Commerce. Private individuals, ie people who do not work, shall not deduct an expense from an income that does not exist


Thanks for the explanation, I am still waiting on my accountant to reply to the same question. It might sound like an obvious answer, but I have never been in this kind of situation before.


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