Income tax allowances

How can I pay less?

The following allowances can be made against taxable employment income:

Income tax allowances
  • Mandatory social security contributions;
  • Contributions up to €5,164.57 to Italian qualified pension funds;
  • Reimbursement for travel and accommodation for business trips up to a maximum of €46.48 within Italy and €77.47 abroad;
  • Reimbursement for laundry, parking and telephone costs for work away from home;
  • Reimbursement for food provision by an employer to his or her employees;
  • Reimbursement for remuneration in kind (e.g. transport to and from the workplace provided by an employer);
  • Share purchase plans granted under certain conditions;
  • Maintenance payments to a spouse (from whom the taxpayer is legally separated or divorced);
  • Expenses related to property income.

A tax credit of up to 19 per cent of the expenses mentioned below is also
granted:

  • Interest on a mortgage on a principal residence (prima casa) or land in Italy, provided that the loan is taken out in a European Union country, up to a maximum of €3,615.20;
  • Medical expenses in excess of €129.11 for general medical expenses and €129.11 for specialist medical treatment, for both the taxpayer and his dependants;
  • Funeral expenses up to a maximum of €1,549.37;
  • Tuition expenses at universities up to the equivalent cost of attendance at a state establishment;
  • Premiums which are for life insurance and health insurance, up to a total
    of €1,291.14;
  • Veterinary expenses exceeding €129.11 up to €387.34;
  • Contributions to non-profit entities up to €2,065.83.

Personal ‘allowances’ are in fact granted in the form of tax credits.

  • Mandatory social security contributions;
  • Contributions up to €5,164.57 to Italian qualified pension funds;
  • Reimbursement for travel and accommodation for business trips up to a maximum of €46.48 within Italy and €77.47 abroad;
  • Reimbursement for laundry, parking and telephone costs for work away from home;
  • Reimbursement for food provision by an employer to his or her employees;
  • Reimbursement for remuneration in kind (e.g. transport to and from the workplace provided by an employer);
  • Share purchase plans granted under certain conditions;
  • Maintenance payments to a spouse (from whom the taxpayer is legally separated or divorced);
  • Expenses related to property income.

A tax credit of up to 19 per cent of the expenses mentioned below is also
granted:

  • Interest on a mortgage on a principal residence (prima casa) or land in Italy, provided that the loan is taken out in a European Union country, up to a maximum of €3,615.20;
  • Medical expenses in excess of €129.11 for general medical expenses and €129.11 for specialist medical treatment, for both the taxpayer and his dependants;
  • Funeral expenses up to a maximum of €1,549.37;
  • Tuition expenses at universities up to the equivalent cost of attendance at a state establishment;
  • Premiums which are for life insurance and health insurance, up to a total
    of €1,291.14;
  • Veterinary expenses exceeding €129.11 up to €387.34;
  • Contributions to non-profit entities up to €2,065.83.

Personal ‘allowances’ are in fact granted in the form of tax credits.

This article is an extract from Living and Working in Italy from Survival Books.

Does this article help?

Do you have any comments, updates or questions on this topic? Ask them here: