TAXATION IN ITALY

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Throughout the year, the taxpayer is required to comply with a set of obligations depending on the category of taxpayer and the tax applicable. It is important to note that, almost all tax returns and fiscal communications must only be sent by electronic filing.
Compliances relating to direct taxation

According to the Italian Law, for Personal and Corporate Tax purposes, taxpayers have to complete an annual tax return in order to compute and pay taxes for the applicable fiscal year and in advance for the current fiscal year.
The tax return must be drawn up using a standard form yearly approved by the tax authorities.
Individuals and partnerships must file an annual tax return by the end of September of the following tax year, while limited liability companies must file the tax return within nine (9) months of the end of the relevant tax period (usually matching the Financial Statement date).
The tax payments are due into two instalments on account and a balance for the previous year.
The first payment on account for FY and balance related the previous FY must be paid by the last day of the sixth month following the end of the relevant tax period. It is possible to postpone the payment by the last day of the seventh month with an additional payment of an interest rate equal to 0.4%.
The second payment on account must be due within the last day of the eleventh month following the end of the relevant tax period.
IRAP
For IRAP purposes, an annual return has to be drawn up and submitted by the same deadline as the income re- turn.
VAT
An annual Value Added Tax return relating to a calendar year must also be filed before the end of April of the following tax year: it must contain the total of incoming and outgoing operations, tax due, deductions, payments made, tax due as settlement or difference as credit.
Starting from January 1st, 2017 the Taxpayers have to submit to the Italian Tax Authorities the following VAT Communications:
• quarterly communication of VAT settlements return – the relevant deadlines for each quarter are:
- 1° quarter: within the 31st of May;
- 2° quarter: within the 16th of September (only for 2018 1st October 2018);
- 3° quarter: within the 30th of November;
- 4° quarter: within the 28th (or 29th) of February of the following year.
• periodic communication of data of invoices received and issued in the course of the calendar year – the relevant deadlines are:
- 1° quarter: within the 31st of May;
- 2° quarter: within the 16th of September (only for 2018 1st October 2018);
- 3° quarter: within the 30th of November;
- 4° quarter: within the 28th (or 29th) of February of the following year (only for 2017 1st semester: within September 18th, 2017; 2nd semester: within April 6th 2018).
In general, settlement is carried out on a monthly, quarterly or infra-yearly basis.
Taxpayers who have to carry out monthly payments must pay any amount due by the 16th day of the month following the one to which the settlement relates or, in the case of quarterly settlement, by the 16th day of the second month following the end of the quarter.
For the last yearly quarter, the payment deadline is March 16th.
All credits will be deducted from the settlement in the following month or quarter.
By December 27th, the taxpayer is asked to provide a payment on account as last settlement of the year.
Offsetting
It is possible to offset credits and debits relating to the same tax (traditional offsetting) or credits and debits deriving from different taxes and social security contributions (horizontal offsetting). However, The Italian tax law provides some limits referred to the offsetting of tax credit and under certain circumstances a certification of the tax return is also required by a qualified professional.
IMU
The IMU (i.e. the Italian municipal tax on property) return has to be submitted to the municipal authority in case changes related to taxable status of buildings, buildable areas, agricultural lands and/or to the taxable status of the taxpayer liable to pay occur. In this last case the return has to be submitted by previous and new taxpa- yers. The filing must be made no later than June 30th of the year following the change. The return is effective for the following years as well, provided that no change in the disclosed information and elements entailing adjustment of the tax due occur.
The tax is payable in two annual installments, in advance on June 16th and balance on December 16th of every FY.