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 1,220 |
| 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, subject to certain terms.
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.