Italy Tax Deductions

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Italy Tax Deductions





  • Relief is given mainly in the form of a credit on tax payable. Some forms of relief are granted as a deduction, that is, a reduction in the taxable income.
  • Most relief refers exclusively to Italian residents.
  • The following amounts are subject to the definitions in law:




Class of Relief Amount - EUR
Credit for Employees Up to EUR 1,880 , depending on income level
Burial expenses Maximum credit of 1,549
Dependent spouse Up to 800
Married parent - dependent child Up to 1,200
Medical expenses In excess of EUR 129 (Max 19%)
Payments for life insurance 19% up to EUR 530
Mortgage Interest 19%, up to 4,000
Donations Up to EUR 1,033 for religious institutes.
Alimony No limit, only to a spouse
Charity Up to EUR 1,033
War Pensions




Italy Business Deductions



Losses
Losses can be carried forward and be offset against up to 80% of the current year's income.
Losses from activities in the first 3 years of operation can be carried forward without a limit.
There is no carryback for losses.

Italy Consolidated Returns

Consolidated returns are allowed, subject to terms, for parent companies with their subsidiaries, when holding 50% or more.
Consolidated returns, if chosen, have to be filed at least for 3 years.

Italy Interest Expenses

In Italy Interest expenses are deductible up to 30% of the income before interest, taxes and depreciation (EBITDA).
The excess can be carried forward indefinitely.

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