When you’re emigrating, starting a business or studying abroad in Italy, here’s how to navigate taxes on large transfers.
Sending a lot of money to Italy for even the most exciting reason can often involve at least one unexciting thing: tax laws and paperwork. Before you move your money out of New Zealand, make sure you are familiar with the laws and regulations in beautiful Italia.
How Italy regulates large remittances
New Zealanders sent $1 million to Italy in 2017, according to data from the World Bank. If you’re sending large sums of money, your recipient could be on the hook for taxes regulated by the Italian Revenue Agency.
As far as we can tell, taxation rules on gifts depend in large part on whether you’re related to your recipient. In general, Italy does not tax gifts of any amount to spouses, children and grandchildren.
If you’re gifting more than about EUR180,000 (approximately NZ$308,000) to a non-relative, your beneficiary may be subject to taxes on receipt. Tax rates vary from 4% to 8% of the amount you’re sending – a large bite out of your gift.
What are the penalties for not filing a large remittance?
With so much attention on money entering and leaving Italy, if you either fail to report large sums, don’t know you have to report them or don’t report them correctly, it will likely be discovered. Encourage your loved ones to declare any large remittance as income on their general tax return with the Italian Revenue Agency.
Failure to file taxes can result in penalties that range from 120% to 240% of the taxes due. To avoid severe penalties that can reverberate throughout your financial future, speak with a professional to guarantee you comply with all the regulations.
Do I have to report large transfers out of New Zealand?
New Zealand law doesn’t need you to report any money transfers to Italy. For transfers over $10,000, your bank or money transfer company has to report it to the New Zealand Government. This is to help prevent money laundering, but you won’t have to do anything yourself.
How will my recipient receive my remittance in Italy?
How your recipient receives your money in Italy depends on your provider and how you sent it. You’ll typically have the option of bank-to-bank transfers, cash pickups and even delivery to a mobile wallet.
To receive your funds in person, your recipient may need to provide ID or a confirmation number. If they own an account with an Italian bank or money transfer company, they may not need to provide this information each time you transfer cash.
As with all international money transfers, be wary of potential fraud and only send money to people you know. Using a reputable provider can safeguard you from potential scams.
DISCLAIMER: This article is general advice. It does not consider your own personal circumstances and may not be applicable to you. You should obtain professional advice and consider your own situation before acting on anything contained in our article.
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