Austerity measure in Italy

Penny

12/04/2011 - 11:55

There is a lot of speculation around but it seems certain that ICI will return on the prima casa although at a lower rate than previously. This will be offset by a rise in the ICI (or whatever this new replacement wil be called) on second and third homes. Also it seems likely that cadastral values will be increased by 30%. This will affect your ICI bill, refuse bill and any purchase taxes on property.There doesn't seem to be a wealth tax introduced althought there are some rumours that luxury property, boats, private planes and luxury cars will have some sort of tax on them. There are also ruours that IVA will go up another 2% but not immediately.We'll have to wait a bit longer to see for sure.....

Topic

Tax and Finance

Comment

Just been reading this on Reuters news site. http://uk.reuters.com/article/2011/12/04/uk-italy-idUKTRE7B20HO20111204

The re-introduction of ICI was to be expected. IMO, its abolition for "prima casa" was lunacy as it was an important (probably the most important one) source of revenue for local government. A wealth tax... seems to be a valid idea. What is another show of lunacy is to increase IVA as this will hurt pensioners and people on lower incomes. These people will have to further trim their expenditure and this is not good for the economy. Trimming government expenditure is going to be an absolute necessity; however, I am certain that both health and education are going to be the first ones to suffer... as usual.

yes, it will be very hard.The old I.C.I. tax will re appear as I.M.U. but this will be recalculated as much as + 60% on the basis of the new "estimi catastali" (the land registry calculation of value) and,it appears will be for ALL "first homes" including those previously exempt such as registered agricutural homes/properties.Whilst direct taxation is not supposed to increase the additional quota which is at the discretion of the single regions can increase from 0,9% to a max of 1.23% the regions can /may increase the cost of petrol/diesel with an extra cent per litre to fund public transport too.VAT will increase from 31/12/12 from 10%> 12% ( for the special low rate) and from 21>23% on everything else!that is high...as far as pensions are concerned it's going to end up more or less as a work till you die scenario! (i'll be 70 to go onto pension!)..

The Italian Welfare Minister crying seems to be fully justified: http://tvnz.co.nz/world-news/italy-s-welfare-minister-cries-while-announcing-cuts-4590400

Bringing back ICI or IMU as it will become makes sense - to remove it seemed a bizarre decision, particularly as it was quite low anyway (especially compared to UK council tax) but enough to make a difference at local government level. To increase IVA makes no sense - it will hit people hard and 'encourage' the IVA avoidance days of old, even with the GdF tightening up on tax avoidance. There had to be a change to pensions - making people retire after 41 years of contributions made no sense especially when it applied to many who had left school at 14! Neighbours retired at 55!!!!!!!!!!!!!!!! Still fit and fully able to work but not worth it financially as they would not have been able to increase their overall pension! So all they did was work in the black and pay no taxes what so ever. Austerity measures have to happen but I just hope that those introduced do not hit the pensioners and less well off the hardest - wishfull thinking I fear.

I wonder how the "young people" of 25-30 who have not found jobs and live at home with parents will get their 41 years of contributions in!

Sebastiano - I thought the IMU on agricultural buildings and land was introduced by the Fiscal federalism bill and replaces the IRPEF on the 'reddito dominicale'. Or have I misunderstood?

We'll have to wait for some of the" finer"details once they passed down thru the official gazzette( once it's passed parliament) down to the old commercialista..to find out exactly what and how much more they want for this...whatever it won't be easy..

Little bit more on what is coming!! http://www.corriere.it/International/english/articoli/2011/12/05/tax-on-...

Does anyone know what the 1,000 Euro cash transaction limit means ? S

theoretically it's supposed to be simple,in other words any product or service purchased with a cost superior to E.1.000. should be paid electronically ie. bancomat/pos -credit card or bank transfer or non transferable cheque ( with the name of the company or receiver written in) avoiding that the "sale" can be occulted and not declared.

Any bill or payment that is over 1000 euros must be paid by traceable means - ie bonifico, cheque, credit card etc- THis is 1000 including IVA so a thing that costs 850, must also be paid for by traceable means as it comes to over a grand when all totted up.

We discussed this measure earlier on, although we thought that the limit was going to be 2,500 euros.... Well, it will only be 1,000 http://www.italymag.co.uk/community/post/interesting-austerity-measure Obviously, they want to keep a tighter control than originally anticipated.

using this clever widget from La Repubblica. http://www.repubblica.it/economia/2011/12/05/news/calcolatore_nuova_ici_imu-26132271/?ref=HRER1-1

Hi Ram. Thank you very much for this. Very helpful. When I worked it out just now it was a lot less than I expected. What I don't understand, and perhaps someone can enlighten me please, is why the Aliquota works out at 515 but then it says that for Prima Casa I will pay 315. If it was Seconda Casa then the amount to pay stays the same at 700 and something. I understand about the rendita catastale being revalued by 5%, then multiplied by the new rate of 160, then multiplied by 4 per 1000 (the new rate of 0.4%). That then gives the Aliquota. What then happens to reduce the rate to pay by 200 for Prima Casa? It also reduced another figure I randomly put in by 200!!

The €200 'deduction' for prima casa is termed a 'franchigia' - (a bit like an insurance 'excess' for which the same word is used) - but it means that prima casa enjoys a 'discount' of €200 (we think...) on the calculated value.

Thanks Fillide. That is pretty generous since the Prima Casa rate is discounted anyway.

It looks like the cash limit is going to be chnaged back to 1000 euro and not 500. Watch this space!

The cash limit has always been 1000 - its the pension that was 500. Some people have said that their banks wont allow them to take out more than 1000 in a single go - they cannot do this. If they try threaten them with a lawyer or a denuncia. You may have to fill ina form saying why you want more than a 1000, and its up to the bank to notify the authorities if they suspect that you are using it for 'illegal' ends, but they cannot refuse you your money. The deduction on prima casa ICI is now 170 and not 200, but if you have kids under 26 living at home you get an extra 50 euro discount for each child.

Just tried to work out our new ICI payment - can someone clarify what the following sentence means "Inserisci la rendita catastale dell'immobile" Is this the cadastrale value? Thanks

You're right RAM. It was this statement on Il Sole 24 that confused me: Contante, si alza la soglia dei pagamenti per cassa (articolo 12). Passa da 500 a mille euro la soglia massima dei pagamenti per cassa e l'importo massimo degli emolumenti (stipendi, pensione, compensi comunque corrisposti dalla pubblica amministrazione centrale e locale e dai loro enti) che possono essere erogati in denaro contante e stabilendo che oltre tale limite gli emolumenti medesimi debbono essere pagati con strumenti diversi dal denaro contante. Dolcevita - It is the 'rendita catastale' from the visura for your property. If your husband will be resident and you won't then you will have to work out your individual 50% liability separately. You will have to pay 7,6 per 1000 and he will pay 4,6 per 1000.