International tax planning for Italians
Any time we look at international tax planning we want to pay attention to the three pillars of residency:
-Residency of the company. You will want to have a company that’s outside of the country in order to decrease the amount of tax paid.
Italy’s base tax rate isn’t horrible, but they have lots of add ons that make it bad. On top of this bureaucracy is quite unreasonable and it’s not so easy to get things done.
Have in mind that registration is not the same as the residency. Simply registering your company outside of Italy is not enough. Italian rules around this are among the strict in the world.
If your company is only registered abroad but work is still being done in Italy, it’s managed from Italy, etc you will still be taxable here.
Consider that lots of tax evasion is not caught straight away, it usually takes them a few years to get to you and then consequences are huge (think about Dolce and Gabbana that got 800 million dollar fine! )
After registering your company outside of the country you will need to have management and control outside of the country as well. Director decision making needs to be abroad. You will want to set up a trust to protect yourself.
Besides this, main business operations need to be outside of Italy.
if you want to have things done in Italy, you will need to have a separate company in Italy that will get things done for your main company. Italian company needs to make as little money as possible, your main company will generate most of your profit.
-Residency of income. Your actual income will need to be make outside of Italy. So this means that you will want your operations to be done abroad. You can look into San Marino, Bulgaria, Georgia etc. A place where you can genuinely hire people and get the work done.
-Residency of shareholders. Trusts might be relevant. Besides trusts we can count on tax treaties or you could shift your residency outside of Italy. There are multiple options to consider.