Most peoples who want to live in Italy doesn’t know what to do or what they gonna need to apply, in the other hand there are some students around here especially new ones who study in Italy don’t know how to apply for Partita IVA so we decided to clarify this subject here, once for all time.
Here we go, first of all, we need to tell what is it, and what we can do with it:
In Italian people call it Partita IVA, in English, we call it VAT number, Americans call it social security number (SSN) and so on. People around the world would call it whatever they want no matter what, but it’s all a number that used for tracking indirect taxation. You may ask what is indirect taxation so here it is, a tax applied to the added value of each phase of production, exchange of goods and services. Did you get it? if you not you can ask it in the comments below…
We almost found out what it is, (Didn’t we?) So let’s make it straight and go to the next floor.
What is the application requirement and how we can apply for it?
Since we provide information for Politecnico di Milano (Polytechnic University of Milan) students so here we will only discuss the Italian version of it. Let it begins: first of all you will need Permesso di Soggiorno – it is the same as residence permit in other countries – so if you don’t have one you should ask for it at the Questura (central police station) where they will link up with the Agenzia delle Entrate (Italian Internal Revenue Service) and provide you one. Once you have your requirement you can go to the nearest Agenzia delle Entrate to apply for Partita IVA, regardless of the tax domicile, at the time of opening the VAT position. It can also be opened electronically by an intermediary authorized to the Entratel service or by the Chamber of Commerce, Industry, Crafts, and Agriculture. There are two models: the AA9 / 11 model for individual companies and the AA7 / 10 model for companies. Anyone can register for it even freelancers, but they have to mention the field they work in and the specific activity.
How to use it and what we have to do after it?
If you knew how to get it or you just find it out now, maybe you should know how you can use it too. Once you have that you can invoice clients – the Partita IVA must be mentioned in each progressively numbered invoice, together with the date, your name and your address for tax purposes – and you become subject to a number of rules as a taxpayer in Italy.
In order to comply to all these regulations, it is mandatory that you follow the advice of a recognized accounting and tax professional, in Italy either “Ragioniere Commercialista” or “Dottore Commercialista”, usually a more sophisticated figure with university education.
Basically, after you got your IVA you have to pay the following:
- IVA taxes every 3 months or every month if you prefer
- Personal revenue tax twice a year in advance and total in July-August and in November
- Also, you could be subject to IRAP tax if you meet certain requirements – usually this means you are organized enough, including employees or a stable HQ
But you may use one of the following to reduce your costs:
- If you are self-employed, you are allowed certain cost deductions for tax purposes
- You may be subject to a synthetic tax assessment program known as “Studi di Settore” which determines your tax performance compared to other similar subjects in your field
- there are some introductory tax regimes for young people and for those who don’t exceed certain revenue levels
So be wise to make your costs stay low. We will talk about it more in our upcoming posts if you are interested.