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What taxes do I have to pay if I want to work remotely from Italy as a freelancer?

imagen de un pueblo de italia

Remote work has opened up a world of possibilities that just a few years ago was almost impossible to imagine. Having the opportunity to work from anywhere in the world is a dream that not everyone can achieve, which is why many people choose to make the most of it by spending long periods traveling to different countries, as is the case with Italy, until they settle in a permanent place.

If you want to spend a few days or weeks and then return to Spain, there's no problem. In most cases, you don’t need to settle accounts with the Italian tax authorities, as it could be considered a tourist trip. However, things change if you plan to spend more than half of the year, or in other words, more than 183 daysFrom that moment on, you will be considered a tax resident. A situation that also has its tax implications, which we will explain in this article. 

imagen de venecia, en italia

Taxes for digital nomads in Italy

The Italian Tax Agency, known as Agenzia delle Entrate, is the agency responsible for implementing and overseeing all tax regulations. Therefore, it is the body with which we must settle our tax payments. 

Since April 2024, Italy welcomed digital nomads who wanted to reside in the country by creating a visa specifically designed for them. Initially, the visa has a validity of twelve months, but it can be extended if certain conditions are met that assure the Italian Government that you meet all the requirements to continue living in the country. The main one is to demonstrate a minimum income of €27,900 per year. This is the amount the Italian government considers the minimum for a resident to be independent and able to cover their expenses.

Once the issue is addressed, the next step is to know exactly which income we need to regularize with the Italian Tax Agency. To make the calculation, we must consider the amount of time we have spent in the country:

En primer lugar, si hemos vivido more than 183 days in Italy, we will need to pay taxes on the income earned throughout the year in all the countries where we have invoiced.

En segundo lugar, si la estancia ha sido shorter than this period,taxation will only apply to the income generated within the country. This situation can occur if, while visiting, we have the opportunity to collaborate with a marketing agency, for example, doing occasional work.

The main disadvantage of the tax processing can be done online, but for this, you need a good internet connection that allows you to upload the relevant documentation and comply with the existing regulations. If you are going to be in Italy for a few weeks, we recommend the $3.5 flat rate from Blink eSIM.. With it, you will have stable internet at maximum speed without having to worry about data consumption. You can download it to your phone before starting your trip and won’t pay anything until you begin using it when you land in Italy. Additionally, the balance has a validity of 24 months, so we won't need more cards if we want to travel across Europe and work from several countries. 

How much do I have to pay for each tax?

If you have registered as a freelancer in Italy,there will be four taxes you need to pay, as it has a tax system quite similar to the one we have in Spain. 

The first tax is the IRPEF and it is generated on the global income of tax residents in Italy and income earned in the country by non-residents. Like in Spain, it is also progressive, starting at 23% for income up to €15,000 and reaching 43% for income starting from €50,000. 

The second tax is added to the IRPEF, is regional, and each area applies it to finance services such as education or healthcare. The range is between 1% and 3.3%, depending on what they deem appropriate.

Next, we will need to pay the social security contributions and they are calculated based on net income. The rate ranges from 24% to 33%.

Por último, llegamos al IVA, algo más caro que en España: un 22%. Como nómada digital, deberás sumar este impuesto a tus facturas y recae sobre el lado del cliente para, a posteriori, regularizarlo trimestralmente con la Agencia delle Entrate. 

Is there any tax benefit for digital nomads?

Italy, like many other countries, has designed a program to encourage international talent to settle in Italian territory. Through the tax regime of impatriati, we can benefit from a reduction of up to 50% on the taxable base of our income. This deduction can be higher if we establish our residence in a southern region of the country. 

Tax benefits last for five years, but they can be extended for another ten if we meet a series of requirements, such as the purchase of a property.for example. 

Italy is one of the most attractive countries in the European Union, and thanks to the tax benefits it offers, it has quickly positioned itself as one of the paradises for remote work for many digital nomads. Make sure to get a good internet connection and enjoy the cuisine, heritage, and culture that the neighboring country can offer you.

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