Job Discussion Forums

[Qaaolchoura]

[artemisia]

Taxation requirements are often a murky area. Obviously residency issues must come into play and those don't sound generous, but least the US has set a clear upper limit (earnings not above $95,100 in 2012) that is generous. I definitely don't like the part about having to declare foreign bank accounts with a balance of US$10,000 (equivalent) or higher. In that position, I'd want to keep several accounts with lower amounts of money or have a bank security deposit box to put cash or silver. (Wasn't that in some film: moving amounts of US$9.995 around???). Earnings from various sources is one thing, but I don't see why what one saves is anyone else's business!

Aside from the US, I don�t understand the relationship between countries that have a double tax treaty with a series of other countries when one of those countries may offer a tax free salary. I don�t know if it�s as simple as if you�re not taxed in the country where you earn a salary, but then you will have to pay income tax in the home country. No doubt it depends on the countries in question, but it doesn't seem to be easy to find clear cut information.
http://en.wikipedia.org/wiki/Tax_treaty#Double_Tax_Relief

[Teacher in Rome]

The tax system described by Mike for Romania sounds very similar to Italy. (For employees of a company.)

If you're a freelancer, it goes something like this:

Invoice 100 Euros
Add on 21% VAT
Taxable income 121 Euros
Automatically deduct 20% for tax
Net income 101 Euros

So far, so good.

At some point next year, the tax authorities will bill you for 20% INPS (NI equivalent). You might also have a regional tax of another 4-5% to pay. So from your net income of 101 euros, you will be left around 75 euros, but of course, in the meantime, you might have had to pay back that VAT you collected on behalf of the state, so perhaps you end up with 55 euros in your pocket once everyone's taken their cut.

If you're like me, the INPS demand came as a bit of a shock, and you couldn't pay it all at once. So you're paying it off in instalments. This has certain advantages: the 20% whack I'm paying off is deducted from my yearly income, reducing my taxable income. (Though of course I've already deducted income tax in my invoices.)

Other things the Italian government like to tax you on:

your house in Italy if you own it
a second house - whether in Italy or abroad (and they will go through records to see if you're a homeowner abroad)
your worldwide income if they know about it - ie if it comes into an Italian bank account / company
your bank accounts abroad (15 euro per bank account per year, plus interest on savings)

Your tax advantages

any other tax you're paying is taken off your taxable income
half of what you pay on your car, petrol, utility bills etc if you work from home (including IVA that you pay on services)
medical costs
insurance / pension contributions

Tax rates in Italy for your common-garden freelancer are one of the highest in the EU.

[HLJHLJ]

[artemisia]

[Qaaolchoura]

[Ixchel]

[HLJHLJ]

Ixchel, I said what I had to say 12 months ago when this thread was actually written. I replied to you as a courtesy because, for whatever reason, you chose to single out a post of mine, not because I have any great desire to continue the discussion. If you really must extend its resurrection further, then I would very much appreciate it if you took the time to actually read it first.

[Ixchel]

I read it and you didn't like my response so ignore me then. No one's forcing you to respond to me.

[artemisia]