Both Italy and the US require large gifts to be declared — but the US places responsibility on the donor and Italy places responsibility on the donee. This means that both you and your recipient may need to declare large gifts, even if you aren’t both required to pay.
Spouse, parent or child. Any amount over €1 million will be taxed at 4%.
Sibling. Any amount over €100,000 will be taxed at 6%.
Other relatives. The full gift will be taxed at 6%.
Non-relatives. The full gift will be taxed at 8%.
Required forms
The tax will need to be paid by your recipient, and they’ll need to fill out an F23 form. It can be filed at any bank or post office.
What are the penalties in Italy if my recipient fails to file?
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 that you comply with the laws of both the US and Italy.
Do I have to report large transfers out of the US?
Generally, yes — though it depends on how much you’re sending and for what purpose. Gifts over $17,000, business transactions over $10,000 and any foreign account in your name that’s held more than $10,000 in the last year will need to be reported to the IRS.
By law, banks report cash transactions that exceed $10,000 and any transaction of any amount that raises an eyebrow. And independent money transfer specialists are sometimes held to thresholds as low as $1,000.
As much as you want — there isn’t a legal cap on how much money you can send to Italy. Some transfer providers will set their own limits, so if you’re planning a large transfer, use a limit-free provider like Xe.
How will my recipient in Italy get the money?
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 or delivery to a mobile wallet.
To receive your funds in person, your recipient may need to provide ID or a confirmation number.
Italy is a country that taxes gifts, which means if you’re sending any amount to someone who isn’t a spouse, parent, child or sibling, they’ll need to pay taxes on it.
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.
Frequently asked questions
You could end up on the hook for stiff penalties, including fines or even jail time if a judge convicts you of tax fraud.
Penalties can be avoided if you can show the IRS reasonable cause for a failure to file, such as a house fire, natural disaster or serious illness.
Starting a business in Italy requires specific tax forms and knowledge of local markets. Learn how to get started with our guide on starting a business in Italy.
Most tourist locations and hotels will accept major credit cards, and sometimes even US dollars (though at weak exchange rates). You’ll also find ATMs throughout the country. Learn more about avoiding stiff fees when paying with plastic in Italy.
Whether products shown are available to you is subject to individual provider sole approval and discretion in accordance with the eligibility criteria and T&Cs on the provider website.
Leah Fallon is a freelance journalist and editor, specializing in personal finance and small business. She owns Birch Tree Bookstore in Leesburg, Virginia.
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