2019 new Italian legal rules

If you have business or personal interests in Italy, or even if you are just visiting Italy as a tourist, you  need to know the following new 2019 rules. The Italian parliament just passed the 2019 Italian budget law (voted on 30 December 2018, in force since 1 January 2019) which includes important new regulations that could affect your interests. Let’s take a quick look at where you can save money, where you need to file some further paperwork, and where you need to patiently wait longer for the wheels of Italian bureaucracy to turn.

In addition to the budget law, the new government has approved  other important  regulations over the past few weeks in an effort to quickly deliver on as many electoral promises as possible, before the end of 2018.

Based on requests from our clients, we have selected a list of recent provisions that could have significant implications for people with interests in Italy.

Real Estate

1. Short-Term Rental Notice

If you rent a property for less than 31 days, for example through Airbnb or even privately, you have to notify the local law enforcement authority of your guests’ personal identification information (name, nationality, date of birth, etc.). This applies even if you rent a property for less than 24 hours.

2. Tax Deductions (tax credit)

All the rules about tax deductions (tax credits) related to private property renovations that were meant to expire by the end of 2018 have been extended until the end of 2019. This implies that you can still get very remarkable tax credit if you spend money to refurbish your Italian property (from 50% to 85% tax credit) to buy furniture or appliances (50%), to fix your yard (35%), to improve energy efficiency (50% to 70%) or the safety of your property (50%).

3. Flat Tax on Store Rentals

Private individuals who own and rent an Italian business unit (for example a store) with surface area no larger than 600 square meters can opt for a 21% flat tax, instead of the regular tax brackets (starting at 23%). This only applies to new contracts.

4. Annual Property Taxes

Local municipalities are free to increase the annual property tax rates (IMU and TASI). Experts expect many Municipalities to take advantage of this provision and therefore local property taxes are expected to increase in 2019. Next payment deadline is 16 June 2019. We will keep you updated on this aspect on our website and social media feeds.

Financial Transactions (cash payments and money transfers)

5. Cash Payments

In Italy there are restrictions to the use of cash. The government increased the maximum amount of cash that can be spent in Italy by foreign tourists to EUR 15,000. It used to be capped at EUR 10,000. This law applies to tourists from the EU and from outside of the EU. Cash payments of EUR 3,000 or more (up to EUR 15,000) are only allowed to pay for tourist services or retail purchases. The maximum amount of cash payments for people who live in Italy (Italian residents) is still EUR 2,999.99.

Immigration (Brexit)

6. Italian Residence for British Citizens

Italy issued a formal notice to advise British citizens that, in the event of a Brexit “no-deal” between the UK and the EU, British citizens who will be residents in Italy before 29 March 2019 (i.e., the date when the UK will no longer be a EU member state) will be entitled to start the procedure to maintain their immigration status.  British citizens with Italian residence (even dual residence) will maintain, for example, entitlement to visa-free travel, long stay permit, access to universal health care, employment, social services and education.

Citizenship

7. Italian Citizenship Application by Marriage: Extended Processing Time

Applications for Italian citizenship by marriage shall be reviewed and processed by the Italian authorities within four years. Prior to now the law said the process would be completed  within two years.

Vehicle Registration Tax

8. Historic Vehicles: Tax Reduction

Vehicles that are 20 to 29 years old and that have historic value get a 50% registration tax reduction. A “certificate of historic value” is required. Vehicles that are 30+ years old still pay no registration tax at all.

More Affordable Services

9. More Options To Save 22% on Services

The Italian government has extended the VAT exemption option to a larger number of professional and business services, such as accounting, real estate agency, architecture and design services (no sales of goods). Experts estimate approximately 1 million professionals and businesses will elect to use such option. When selecting a service provider ask if his/her invoice would be subject to the standard 22% VAT (sales tax) or if he/she has opted into the newly extended VAT-free regime.

Please contact us with your thoughts and questions regarding the new regulations above. Over the next days we will publish more information on these topics based on feedback and comments.