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Taxes in Italy for digital nomads: All you need to learn
Are you a digital nomad paying taxes in Italy? Find out which taxes are compulsory and what benefits you’re entitled to.
A digital nomad living and working in Italy has to pay a series of taxes, don’t you know what they’re? Don’t worry, throughout this article we are going to look at how the Italian tax system works for digital professionals like you. It’s necessary to comply with the tax laws of this country to avoid future penalties for not knowing which charges apply to you.
In addition, the Italian government has implemented a number of benefits to alleviate taxes for digital nomads, as well as double taxation treaty agreements. If you’re interested in finding out more, don’t miss the information we have for you. Let’s start!
How do taxes work for a digital nomad?
Taxes for a digital nomad in Italy are governed by the number of days you stay in the country. If you reside more than 183 days a year on Italian territory, you’ll be considered a tax resident and, in that case, you’ll be taxed on all your overall income under the Italian tax system.
On the other hand, if you don’t plan to stay the 183 days in this country, you won’t be a tax resident and will therefore only have to comply with the declaration of income generated within the country, but not globally. For a more detailed explanation of how taxation works in Italy, we suggest you take a look at our article: Taxes in Italy: What are they and how much do I have to pay?
Which law governs taxation for digital nomads in Italy?
The Italian tax system is regulated by the Consolidated Income Tax Act (TUIR), which sets out the rules applicable to tax residents. This law has been in force since 1986 and establishes which income is subject to taxation and on what conditions. The tax year in Italy coincides with the calendar year and the tax return is usually filed between April and November of the following year, depending on the type of taxpayer.
The Italian Tax Agency (Agenzia delle Entrate) is the entity in charge of the application and supervision of tax regulations, as well as the management of tax declarations and payments. As a digital nomad in this country, you must file a tax return using form 730 or form Redditi PF, depending on your employment situation and source of income.
When do I have to start paying taxes in Italy as a digital nomad?
As of 2024, this country has joined the list of European countries to offer a visa for digital visa for digital nomads. With this visa you can stay in Italy working for one year, although it can be extended if you continue to meet the conditions, such as proving a minimum annual income of €27,900 ($30,210). In this way, the government determines that you can cover the costs of your stay in the country.
So when should a digital nomad start paying taxes in Italy? This will depend on the length of stay and tax status. Although we’ve already mentioned it in the previous section, here’s a brief summary:
- Tax resident: Residence for more than 183 days within a tax year, you must be taxed on your worldwide income.
- Non tax resident: Residence of less than 183 days, you’re only taxed on income generated within the country.
Tax benefits for digital nomads in Italy
The Italian government, aiming to encourage digital nomads to come to Italy and bring international talent into its system, has designed a series of tax benefits to alleviate some of the tax burden in the first years of residence.
One of the great attractions of the visa for digital nomads in Italy is the impatriati tax regime, as you can benefit from a reduction of up to 70% of the taxable base of your income, rising to 90% if you establish your residence in the south of the country. This benefit lasts for five years and can be extended for a further five years, up to a total of 10 years if you meet certain additional requirements.
In addition, Italy also offers a special tax regime for high net worth individuals called Res Non Dom, which allows certain foreign digital nomads to pay a flat substitute tax of €100,000 per year ($104,043) on their foreign-earned income, regardless of your total earnings.
Finally, if as a digital nomad you have created an innovative start-up, you can benefit from partial exemptions on the Regional Tax on Productive Activities (IRAP) and on social contributions during the first years of activity.
How much should I pay in taxes in Italy?
The Italian tax system has established a series of taxes for a person working as a digital nomad and residing in Italy. Different tax rates are applied to Travellers’ income depending on their tax status.
In addition, depending on your economic activity and your level of income, other local and regional taxes may also apply. The main taxes you should be aware of are as follows:
Personal Income Tax (IRPEF)
This tax is levied on the overall income of tax residents in Italy and on income earned in Italy by non-residents. The IRPEF is a progressive charge that follows a scheme of brackets, designed so that those with higher incomes contribute more to the system, and these are its rates:
- 23% rate: Income up to €9,100 ($9,475).
- 25% rate: From €14,501 to €19,500 (up to $62,400).
- 35% rate: From €14,501 to €19,500 (to $62,400).
- Rate of 43%: From €50,000 ($54,170).
In addition to the national IRPEF, you’ll also have to pay regional income tax. Each Italian region uses it to finance services such as health and education in that area. Local councils are free to set their own rate within a range of 1 % to 3.3 % of your taxable income.
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Social security contributions
If you’re self-employed and a digital nomad in Italy, you have to face taxes on social security contributions. To do so, you’ll have to register with the relevant chamber of commerce and pay a fee of between 24% and 33% of your net income.
Value Added Tax (VAT)
Digital nomads offering services within the European Union are subject to Italian VAT, which has a standard rate of 22% for this type of activity. You’ll have to add this tax to your invoices and collect this money, which is paid by the end user of the service, and then pay it into the Italian tax system.
Double taxation and agreements with Italy
Italy has signed a number of double taxation treaty conventions with more than 100 countries, among them: Spain, France, Germany, USA, Mexico, Argentina, UK, etc. How does this kind of treaty influence your taxes as a digital nomad in Italy? The main advantage is that you won’t be taxed on the same income in Italy and in your home country to avoid double taxation in two different jurisdictions. These agreements allow tax paid abroad to be offset by tax deductions.
Where can I get advice before paying taxes as a digital nomad in Italy?
At the start of a new residence in a foreign country, it can be difficult to understand how the tax system works, so we advise you to seek advice from an advisor specialising in these matters. This way, you’ll manage your taxes as a digital nomad in Italy in a completely professional way and help you manage your finances.
In addition, these agencies will carry out a study of your professional profile and people in order to offer you the tax benefits that belong to you, as well as new measures approved by the government. At least for the first year, it’s a good option to have your tax return prepared by an international tax expert. Here are some of them:
| Consultancy | Services offered |
|---|---|
| Studio Tributario Associato | Firm specialising in tax and fiscal advice for expatriates and remote workers. |
| Expattax Italy | Consultancy focused on foreign taxation in Italy, with online services. |
| Tasse Facili | Platform offering tax advice and tax return management in Italy. |
| Italian Tax & Legal Consulting | Agency focused on tax and legal advice for foreigners in Italy, with multilingual support and online services. |
How to connect to the internet as a digital nomad in Italy
We know that digital nomads are always on the move around the world. Living in Italy, you can make the most of the opportunity to visit the most most beautiful cities in the country or enjoy cheap flights to other neighbouring countries. So that you don’t lose your internet connection on these trips, we want to tell you about the new Holafly Connect plans.
These subscriptions guarantee you a reliable and uninterrupted connection to all your destinations, as the same eSIM covers you in more than 170 locations. With the Holafly Connect plans, you forget about unstable networks or possible disconnections, which is essential for teleworking. There are 3 types of monthly plans, which automatically renew, guarantee you a 5G connection speed and global coverage:
| Plan | Details | Rates |
|---|---|---|
| 10 GB Plan | For short trips or essential connectivity needs. | €39.90 ($40.93) |
| 25 GB Plan | Make video calls, use collaborative platforms and download the files you need on any of your devices | €49.90/month ($51.19/month). |
| Unlimited Plan | The most complete of all, for remote workers and people who need to have a constant connection on several devices simultaneously. | €64.90 ($67.90) |
Real case: Paying taxes as a digital nomad in Italy
To give you a clearer picture of the whole process of paying taxes in Italy as a digital nomad, we’d like to introduce you to the case of Pierre, a 28-year-old SEO copywriter from France. His dream had always been to live in Italy, specifically in Rome, so he worked in France to get a 100% remote job and when he did, he packed his bags and within two months he was settled in Vatican City.
The first thing he did was to contact a consultancy specialised in digital nomads in Italy and they helped him apply for a digital nomad visa. After spending more than 183 days in the country, he became a tax residentand was advised by his adviser that he should be taxed on all his global income in this country. We detail the steps he had to take with the help of his agency:
- Tax registration: Registered with the Italian Tax Agency (Agenzia delle Entrate) and obtained a tax identification code (codice fiscale), which is necessary for all tax procedures.
- Income declaration: He filed form 730 to declare your annual income and apply available deductions.
- Tax payment: As his income was €40,000 ($41,617) per year, he paid the corresponding IRPEF (23% for the first €15,000 ($15,606), 27% for the next €13,000 ($13,525) and 38% for the rest).
- Social security contributions: Being self-employed, he registered with the INPS and paid 24% of his income to social security.
- Double taxation adjustments: As he paid tax in France, he claimed the corresponding deduction in Italy under the double taxation convention.
Frequently Asked Questions about taxes for digital nomads in Italy
You must spend more than 183 days to be considered a tax resident. If so, you’ll be taxed on all your earnings in Italy and abroad.
If your home country has a double taxation treaty with Italy, you’ll benefit from not having to pay tax twice on the same income. To do so, you must submit the relevant documentation to the Italian Tax Office.
Only if you’re considered a tax resident, then you must apply for a tax identification number (codice fiscale), which is necessary for tax and administrative formalities.
In Italy, the tax return is filed between April and November of the year following the tax year. The exact dates depend on the filing method and whether you file independently or with a tax advisor.
To reduce your taxes as a digital nomad in Italy, it’s advisable to consult an expert in international consultancy. These specialised agencies will be able to manage and evaluate possible tax deductions and benefits available, such as the impatriate regime or partial income exemptions under current regulations.
