Taxation in Italy

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Taxation in Italy

Taxation in Italy refers to the system of taxes levied on individuals and businesses by the Government of Italy. The Italian tax system is administered by the Agenzia delle Entrate, which is the Italian Revenue Agency. The system is characterized by a combination of direct and indirect taxes, including income tax, corporate tax, value-added tax (VAT), and other local taxes.

History

The modern Italian tax system has evolved significantly since the unification of Italy in the 19th century. The current structure was largely shaped by reforms in the 1970s and 1990s, which aimed to simplify the tax code and improve compliance.

Types of Taxes

Income Tax

Income tax in Italy is known as Imposta sul Reddito delle Persone Fisiche (IRPEF). It is a progressive tax levied on the income of individuals. The tax rates vary depending on the income brackets, with higher rates applied to higher income levels.

Corporate Tax

Corporate tax, or Imposta sul Reddito delle Società (IRES), is levied on the profits of companies. The standard corporate tax rate is 24%, but there are various deductions and credits available to businesses.

Value-Added Tax (VAT)

Value-added tax (VAT) in Italy is known as Imposta sul Valore Aggiunto (IVA). The standard VAT rate is 22%, with reduced rates of 10% and 4% applied to certain goods and services.

Local Taxes

Local taxes in Italy include the Imposta Municipale Unica (IMU), which is a property tax, and the Tassa sui Rifiuti (TARI), which is a waste collection tax. These taxes are administered by local municipalities.

Tax Administration

The Agenzia delle Entrate is responsible for the administration and collection of taxes in Italy. The agency provides various services to taxpayers, including tax filing assistance, audits, and dispute resolution.

Tax Evasion and Compliance

Tax evasion has been a significant issue in Italy, leading to various measures aimed at improving compliance. These measures include stricter penalties, increased audits, and the use of technology to track transactions.

Related Pages

• Economy of Italy
• Government of Italy
• European Union Taxation
• Agenzia delle Entrate
• Value-Added Tax