# Coming up on one year in Italy, is there anything we need to remember?



## Mrtcpip (Feb 15, 2014)

Hi there,

We are trying to make sure we don't forget anything prior to our year anniversary in Italy. (We came End of April, 2014)

We renewed our Italian health care Jan 1, so we are good there.
What about the PdiS? It expires at the date of our arrival 2016, we received a 2yr PdiS. I recall someone told me that 2-3 months before the end of the first year we need to revisit the questtura. Is that correct? Do we need to go and do anything there or elsewhere?

Thanks for the help!


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## Mrtcpip (Feb 15, 2014)

I may have found the answer, I stopped in at the Anagraphe yesterday, and they told me that I just need to go to the Questura 2-3 months prior to the final date. 

Thanks!
lane:


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## BBCWatcher (Dec 28, 2012)

Tax and financial filings.


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## pudd 2 (Dec 10, 2008)

top up your sence of humour


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## Mrtcpip (Feb 15, 2014)

BBCWatcher said:


> Tax and financial filings.


I am not working here in Italy and therefore have no Italian based income. My understanding is that I will not have to file Italian taxes or financial filings. Is that an oversimplification? 

:ranger:


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## accbgb (Sep 23, 2009)

Mrtcpip said:


> I am not working here in Italy and therefore have no Italian based income. My understanding is that I will not have to file Italian taxes or financial filings. Is that an oversimplification?
> 
> :ranger:


Yes.

If you are tax-resident in Italy (you almost certainly are) then you must file Italian tax returns on your worldwide income. This includes US Social Security payments, distributions from tax deferred savings (401k's, IRA's) and some types of pension income.

Note, I am not saying that you will ultimately owe more tax than you would if you filed solely in the US, but you are still required to file Italian (and US) tax returns. Along with some other gotchas.

There is some info in this thread: http://www.expatforum.com/expats/it...ing-italy/654666-taxes-us-residing-italy.html


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## BBCWatcher (Dec 28, 2012)

And Form RW.


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## Mrtcpip (Feb 15, 2014)

Thank you for the help. I am going to find a local tax professional to help me, but in lieu of that I had a few questions to understand this better. In reading further, I see the topic of wealth taxes, which is painful reading that in my enthusiasm to move to Italy I must have skipped over. (sigh)
"Italy introduced a new tax on financial assets held abroad by Italian tax resident individuals (imposta sul valore delle attività finanziarie detenute all’estero, or IVAFE), which is effective from 2011. The tax rate is 0.1% for 2011 and 2012 and 0.15% from 2013 onwards."
Do I understand that if a person has $1,000 in financial assets, (US Stocks & Bonds), he is liable for an Italian wealth tax of 0.15% on an annual basis? ($1,000*0.15=$150) 
Also mentioned, "In the case of double taxation, it is possible to deduct the wealth tax paid in the country where the financial asset is held." Can you explain this to me? I am not sure if it means that if a person lives in country that also has a wealth tax, they would not pay a double wealth tax, rather would pay in one country and then count that as a credit against the other countries wealth tax?

Thanks again :juggle:


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## BBCWatcher (Dec 28, 2012)

Mrtcpip said:


> Do I understand that if a person has $1,000 in financial assets, (US Stocks & Bonds), he is liable for an Italian wealth tax of 0.15% on an annual basis? ($1,000*0.15=$150)


No, you've got the decimal point wrong. You've calculated a 15% rate, which would be exciting.

First of all it's a 0.2% rate now (tax year 2014). The figure 0.2% is equal to 0.002. So it's $2 in tax per $1000.

There's also IVIE, the wealth tax on foreign real estate, with a rate of 0.76% (0.0076) or $7.60 in tax per $1000.

It's a little more complicated than that since there are a couple exceptions and caveats, but that's the basic idea.



> Also mentioned, "In the case of double taxation, it is possible to deduct the wealth tax paid in the country where the financial asset is held." Can you explain this to me?


Some other countries have wealth/property taxes. Any such foreign wealth tax can generally be credited against the wealth tax owed in Italy. If the Italian rate is equal to or lower than the creditable foreign rate, zero wealth tax is owed to Italy. Yes, the property tax you pay to a city in, say, Kansas for real estate in Kansas is likely deductible from your Italian IVIE.

You also have to check the tax treaty (if there is one) to see if that helps you avoid tax in Italy.

If you owe them, you might be able to factor Italian wealth taxes into your U.S. cost basis when it comes time to sell U.S. assets. But I'm not sure about that. I'm almost certain you cannot use the U.S. Foreign Tax Credit to take into account Italian wealth taxes. The FTC is for foreign income taxes. IVAFE and IVIE are not income taxes. You can avoid IVAFE (at least) by transferring assets into Italy, but that's not necessarily a good idea since there are likely both immediate and ongoing costs associated with such a transfer.


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## Mrtcpip (Feb 15, 2014)

Thank you BBCWatcher, I agree, using the wrong decimal place made me very excited! 

I appreciate your help and math skill!


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