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CORRUPTION

Italy police find €300k stashed by arrested tax judge

His job was to come down hard on tax evaders, instead an Italian tax judge was arrested in December on suspicion of corruption in judicial acts.

Published: 29 January 2016 09:14 CET
Italy police find €300k stashed by arrested tax judge
Photo: Images Money

The man is accused of accepting bribes in a case linked to the Milan-based firm, Swe-Co Sistemi, a distributor of electrical goods.

On Thursday, Italy’s financial police found some €267,000 in cash, divided into envelopes that were distinctly connected to their supplier, hidden in two security boxes.

More cash was found in the home and offices of the judge, bringing the total to €300,000.

Police believe the money was not earned from his legal activities, but through bribes, especially after his secretary claimed he worked on “few cases”, Corriere reported.

Police caught wind of the hidden cash through wiretaps and a witness statement from the secretary.

A female colleague of the judge was also arrested on Thursday on suspicion of corruption. 

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TAXES

How does Italy decide if I’m a tax resident in the country?

Taxation in Italy is famously complex, often creating confusion about who's liable to pay taxes in the country and who isn't. But how do Italian authorities actually decide if you’re a tax resident?

Published: 17 September 2024 15:22 CEST
How does Italy decide if I'm a tax resident in the country?

Italy’s tax bureaucracy can be tough to navigate for Italians and foreigners alike, and situations such as frequent travel, vacation properties and remote work can all cause further confusion.  

Italian law defines a tax resident as anyone who lives in Italy for at least 183 days per calendar year (184 days in leap years). That includes anyone formally registered as a resident of Italy or simply residing here unofficially for more than half the year.  

Italian tax residents must pay tax on worldwide income, not just earnings generated in Italy. That’s why it’s especially important to know what the Italian tax office (Agenzia delle Entrate) considers when applying the 183-day rule – and how it knows how much time you spend in Italy.

The general rule  

For someone who splits their time among several places, the tax authority considers whether Italy is their “principal place” of business, economic interests and personal relations. According to a 2022 ruling from the Court of Cassation, Italy’s highest appeals court, officials look at whether the person owns property or businesses in Italy, has an Italian bank account, or has relatives here.

READ ALSO: Do I need to declare my foreign bank accounts to the Italian taxman?

If you don’t have European citizenship or an Italian immigration visa, you can only legally stay in Italy for 90 out of every 180 days. In that case, you probably won’t meet the 183-day rule.

Keep in mind, though, that the 183 days don’t have to be consecutive, and that short trips outside the country don’t necessarily count as not living in Italy for tax residency purposes if you have business and personal ties to the country.

Proof of residency

Tax authorities look at a variety of factors – some obvious and others less so – to determine how much time you spend in the country each year.

Anytime you enter or exit Italy directly to or from a non-Schengen Area country, your passport will be stamped, providing a record of how long you were in the country.

But given the EU’s open-border policy, tax authorities’ investigations go far beyond passport records.

Reports of wealthy Italians, especially celebrities, pretending they live in countries with a lower tax burden, like Monaco, have also forced the government to get creative.

In addition to property ownership and rentals, which are all registered with the government, tax authorities look at vehicle records, gyms and other club memberships, cell phone records, purchases for flights and train tickets to Italy, credit card use and postal records.  

In the case of celebrities, tax officials even use paparazzi photos and news stories to reconstruct a person’s movements; for the rest of us, social media posts and online activity can provide legally admissible clues about where we go and when.

Alternatively, if you’ve been accused of owing tax in Italy even though you spend most of the year in a different country, these are the types of records you can provide to show that you were actually living abroad.  

When in doubt, you can get a tax residency certificate from your home country stating you live and pay taxes there. If Italy has a double taxation agreement with the country, you will only be taxed in one place.

Paying tax on a holiday home

If you own a holiday home but live there for less than half the year, you will not become a tax resident of Italy simply by virtue of owning property here.

However, you’ll still need to pay any relevant property taxes and waste collection fees on the home.  

READ MORE: What taxes do you need to pay on a second home in Italy?

And any income that you earn in Italy – including from renting out a vacation home when you’re not there – is also subject to Italian taxation even if you’re not a tax resident.

Tax residency for digital nomads

In April, Italy introduced a new digital nomad visa for highly-skilled workers available to both freelancers and remote employees of international companies.

While the digital nomads will generally be legal residents of Italy who must pay tax in the country, some might qualify for a tax scheme for lavoratori impatriati (workers relocating to Italy), which only taxes 50 percent of their income.  

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