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Italy - Tax free for 2 years?!

Discussion in 'Teaching abroad' started by gwendathomas, Apr 22, 2012.

  1. I have been offered a job in Rome and I have read a lot about 2 years tax free if you're from the UK. Does anyone know what the conditions are (e.g. state school rather than private - I'm in the latter) and whether this is something you have to claim back once back in UK or is in effect whilst you're in Italy?

    Any help would be greatly appreciated ... plus anything on Rome and getting by financially!
  2. amysdad

    amysdad Established commenter

    Are you sure you're not confusing Italy with the Middle East posts? Just seems a bit unusual for an EU country to me.
  3. lunarita

    lunarita Senior commenter

    Be careful and try searching back for past discussions about this.
    I don't understand the details of the deal - a UK tax person told me of a deal that has certain conditions which don't seem to apply to the average teacher going abroad - so maybe there's another arrangement specific to teachers.
    However what DOES seem to be the case is that once the two years is up, you not only become liable for tax from that point on, but also for the 2 years you haven't paid.
    Personally I've never worked in italy but from comments on this forum some teachers who stayed longer than two years received tax bills they weren't expecting.
  4. lovely.lady

    lovely.lady Occasional commenter

    Yes it is true! You still have to pay contributions towards Inps (pension) and health benefits which can total Euro 200 per month. After 2 years you start to pay tax but your actual monthly take-home pay doesn't go up in fact you might find a slight reduction.
    Italy is very expensive to live. The one thing that is reasonable is public transport though strikes are frequent. I've been teaching in Milan for 2 years and am not staying after this year. Rents are high, utility bills are OK. You will need to pay out Euro 1100 before food and utilities so this should reflect how much you will have to play with.
  5. OP - Yes, there is a tax agreement between a number of (all?) EU countries whereby freshly arrived workers do not have to pay taxes for two years, but will have to pay back taxes should they wish to extend their stay. Actually, when I first moved to the UK all those years ago, I did not pay taxes for the first two years thanks to the same agreement. This agreement is also in place in the USA. Not a lot of people know that (he says in his best Michael Caine voice).
    Lovely.lady - if I may, I would be careful in so readily divulging info about yourself. You have established not just the country but also the city you live in. You may also have mentioned what subject you teach in previous threads though I cannot remember for sure. All this would make yourself very easily identifiable to your supervisors, and since you have mentioned some disagreements with them, it might be safer for your own sake to be a little more discreet as to who you are.
  6. David Getling

    David Getling Lead commenter

    Couldn't agree more. As I understand it this tax scheme is meant to be for people who are on temporary assignment in Italy, AND so you will still be liable for that tax somewhere. Don't kid yourself that any such scheme is for your benefit. They are tax avoidance schemes for the schools, and of questionable legality. With the new tightening up on taxes in Italy, they may soon come under closer scrutiny, so those on them might suddenly find they have a much smaller disposable income.

    Also worth looking at VERY CLOSELY is your health cover. From what I gather there are a lot of teachers (myself included) who may only be covered for emergency treatment (if that).

    This is spot on! I pay out Euro 900, but I'm told I've been lucky, and I wasn't that warm this winter. Italy doesn't pay well compared to countries like Germany, and yet things seem to be generally more expensive. How on earth most Italians, who are paid less than expat teachers, manage is beyond me.
  7. lovely.lady

    lovely.lady Occasional commenter

    I think answering a question about Italian tax and general stuff about the cost of living hardly constitutes a disciplinary action!
  8. I think Haddock may just be erring on the safe side. The internet and this forum in particular does have a very strong network and one must tread warily. However, being honest, open and genuine may be seen as naivety by some. Hows the job hunt going? PM me if you need any assistance.
  9. Mr Chips is right L.L. This was just meant as a friendly word of advice from someone who has been through the grinder because of past online indiscretions. I seem to remember that you complained about your school a number of times in previous posts. I don't mind, and you are correct that it is none of my business. But your HoD or HT could potentially take umbrage. That doesn't necessarily mean disciplinary action. But when a school asks your current employers for a reference, this may come into the conversation to your detriment.On that note, I will take your advice to 'get a life' and won't mention the matter again. Good luck in your job search.
  10. Thanks everyone for all your help, you've given me lots more information and areas to look into - had a feeling the 2 years tax free thing wasn't quite as straight forward as I hoped!

    If anyone is in Rome and has any tips or general thoughts, I'd love to hear them.
  11. Oh and I thought it may be useful to copy the info I found on the HMRC website http://www.hmrc.gov.uk/international/italy-index.htm concerning the Italy/UK tax treaty...

    An individual who visits one of the Contracting States for a period not exceeding two
    years for the purpose of teaching or engaging in research at a university, college or other
    recognised educational institution in that Contracting State and who is or was
    immediately before that visit a resident of the other Contracting State, shall be exempt
    from tax by the first-mentioned Contracting State on any remuneration for such teaching
    or research for a period not exceeding two years from the date he first visits that State for
    such purpose.
  12. lovely.lady

    lovely.lady Occasional commenter

    Too many words! Does it make sense?
  13. If you are in UK less than 57 days in a single tax year you are not subject to UK taxes. This is the basis of many non-DOMs.
    However, Italy has VAT of 23% and very high income tax rates. Don't have any illusions. If an emplyer tell you otherwise they are doing summink illegal.
    The only parts of Italy that have low or no tax are the Vatican (no kids in that country, at least officially) San Marino (which is nowhere near Rome) and Campo d'Italia, an Italian enclave in Switzerland that has a very special status.
    Rome is at least as expensive as UK.
    On leaving Italy it may be you can take certain monies with you (like your occupational pension) and other monies not (National Insurance for example.)

    This employer sounds dodgy.
  14. Given the recent Italian involvement in countries further south perhaps
    sinus bellum pecuniam est might be more appropriate?
    or even mihi vectum non respondit. It might help when claiming medical expenses.
  15. David Getling

    David Getling Lead commenter

    OK, I'm getting a little confused. Are you saying that as a British citizen one effectively has a 2 year tax holiday, without having to pay it anywhere?

    My present school puts teachers coming from the UK on a "British Contract", which means that they continue paying tax in Blighty. Are you saying that the school has screwed up and that they shouldn't be paying tax at all? And as for me, they told me that as I was coming from Germany I'd have to pay Italian taxes, even though I'm a British citizen. So am I getting even more screwed?
  16. lovely.lady

    lovely.lady Occasional commenter

    It is confusing! It is only teachers who are British Citizens as well as coming direct from the UK who are tax free in Italy for the first 2 years. No tax in the UK to be paid as there is an agreement!
  17. You're welcome gwendathomas...glad I could help. Hate to throw a spanner in the works, but I think you need to check this tax issue out David regarding those who come from outside of the UK and direct from the UK.
    Teachers I that I have worked with in the past have paid no tax in both of the above situations if placed on an Italian contract. However, if on a british contract in Italy, I believe that this poses a different tax situation. Not sure what it is though.
    Confusing or what!
  18. David Getling

    David Getling Lead commenter

    Thanks for that lovelylady and farfetched.

    So, if you are right, it seems that I'm getting shafted due to sheer incompetence.

    And my colleagues, on the "British Contract" are being shafted so that the school can avoid paying some tax.
  19. Hi Gwenda,

    I have also been offered a teaching position in Rome starting in a few months and am so glad you have started this thread! I was told that there is a 2 year tax break, plus two deductions - 1 for Pension/Health at 9.19% and a TFR Severance Pay which is 7.4% of your salary and you get this back at the end of your contract. Not sure how much of this is the same for you and that doesn't seem to include Italian Tax which I read someone say was 23%? I was also told that rent is 600-800 if just out of Rome and around 1000 within Rome. I think we need to accept it will be very expensive but will be amazing!
  20. I've inboxed you :)

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