VAT question: deducting, etc. when living abroad (eg. Italy)
Thread poster: Jasmina

Jasmina  Identity Verified
United Kingdom
Local time: 02:24
Italian to English
Oct 7, 2001

Dear all,

I am still officially resident in the UK, but now live in Italy and work mainly for Italian agencies. I don\'t earn enough to be VAT registered, so I\'ve been deducting 30% \"Ritenuta d\'acconto\" from my invoices (or receipts as they\'re called when there\'s not VAT), and leaving it at that. This is what I\'ve been told to do as I\'m resident abroad. Does anyone know if I need to declare my earnings?

Also, I\'d like to start working for UK agencies; how do I go about paying taxes in this case?

Thanks in advance!


Giles Watson  Identity Verified
Local time: 03:24
Italian to English
Have a word with a good accountant Oct 8, 2001

Hi Jasmine,

In your situation, I\'d invest some time and cash in having a word with a reputable \"dottore commercialista\" about your tax situation, particularly if I were intending to reside in Italy for any length of time.

As things stand, you will presumably be invoicing from a UK address and declaring your income to the UK authorities but if you are actually resident in Italy, and generating most of your income here, it might be wise to get an Italian tax code, as well as all the other bits and bureaucratic pieces.

As a freelance, the best status to have (particularly from the customer\'s point of view) is VAT (IVA) registration. There is no lower income limit for VAT in Italy but the fairly substantial running costs (accountant\'s fees and so on) mean that it is a burden unless you have a basic turnover of at least 20 or so million lire (it depends on how much bureaucracy you are prepared to deal with personally and how nice your accountant is prepared to be!).

The ensuing paperwork and the dates you have to remember for VAT payments, income tax, national insurance contributions and endless other taxes will be a bit of a shock at first, as will the proportion of your earnings you find yourself signing away on the F24 form at the bank.

Alternatively, the Italian agencies you work for might be prepared to give you a \"cococo\" contract (collaborazione coordinata e continuativa), which is a little less messy and involves less expenditure on accountants. Working like this would limit your potential customer base, though.

Invoicing customers with \"ritenuta di acconto\" (20% in Italy) is not a sustainable long-term option. It tends to be regarded by the authorities as tantamount to evading insurance contributions and quite rightly shunned by serious employers. However, it can be a way to get started while you are sorting things out.

There aren\'t really any other - legal - ways to arrange your affairs in Italy, unless you are already registered for VAT as, say, a doctor and do some translation on the side (paid work that falls beyond the scope of your VAT registered activity can be invoiced with a separate procedure).

When I started translating professionally in Italy, I asked a business consultant friend for the name of a reputable \"dottore commercialista\". I went to see the gentleman in question and he gave it to me from the hip (I\'d never even heard of half the taxes and forms that I am now only too familiar with).

Still, over the past ten years or so, Enrico and his colleagues have been well worth their not inconsiderable fees in saved time and aggravation.

Bear in mind that I already had some business experience in Italy, although not as a self-employed worker. If you are new to the country, the money you hand over to the accountant will probably be even better spent.

In bocc\'al lupo!



Angela Arnone  Identity Verified
Local time: 03:24
Member (2004)
Italian to English
+ ...
Tax is a messy business Oct 9, 2001

Dear Jasmina,

Giles has given you some excellent advice and I would add that you might like to ask a friend to recommend a good accountant. Someone to guide you smoothly through this phase before you get into some hot water.

For instance why are you paying 30% rda when I only pay 20%? Are you paying UK rates?

Getting a tax and VAT code are really easy things to do (you don\'t need an accountant for that) and you\'ll sleep easier at night. As to finding UK agencies - that is a lot more difficult than finding an accountant...



Werner George Patels, M.A., C.Tran.(ATIO) (X)
Local time: 21:24
German to English
+ ...
EU - does it really work???? Oct 9, 2001

Just a personal aside:

With so much talk about harmonization and the free movement of people, goods and services, it makes you wonder about the future of the EU, given such horror stories as we get to read in these forums.

I don\'t live in Europe (anymore, thank God!), but are things (especially tax matters) really that complicated and narrow-minded these days?

The way I see it, freelance translators don\'t have it easy in Europe. First, their rates are much lower than in North America, so their income is considerably lower. Second, our European colleagues usually don\'t get paid under 60 days. And third, while they are still waiting to get paid, their local tax offices are already knocking down their doors, demanding instalment payments of several ludicrous taxes.

I have been following your discussions here and on other websites, and frankly, the mental image I now have of Europe is one of utter chaos.


gianfranco  Identity Verified
Local time: 00:24
Member (2001)
English to Italian
+ ...
Do not worry... Oct 10, 2001


On 2001-10-09 15:42, G2E wrote:

... I don\'t live in Europe (anymore, thank God!) ...

... the mental image I now have of Europe is one of utter chaos. ...

utter chaos? icon_eek.gif where? icon_confused.gif

Here, in Europe, we are quite fine.

Thank you very much. icon_biggrin.gif

[ This Message was edited by: on 2001-10-10 05:01 ]


Werner George Patels, M.A., C.Tran.(ATIO) (X)
Local time: 21:24
German to English
+ ...
Your lips to God's ear Oct 10, 2001

Well, if you say so. I hope you are right, but all those reports coming out of Europe speak a different language.


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