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Where Taxpayers and Advisers Meet

Italian AIRE Tax/Penalty help/advice

Lost in Bureaucracy
Joined:Thu Dec 16, 2021 10:40 am
Italian AIRE Tax/Penalty help/advice

Postby Lost in Bureaucracy » Thu Dec 16, 2021 10:55 am


Hope someone can help. My partner is an Italian national who, since around 2014, has lived and worked in the UK.

He owns no assets in Italy.

He owns (subject to a mortgage) a small flat in the UK and all his earnings in the UK have always had tax deducted at source under PAYE - he has always been an employee, never self employed.

He was not aware that according to Italian law (called AIRE) he was supposed to have declared to the Italian government that he was living permanently in the UK. They are now trying to charge him almost £6,000, which is made up of a penalty amount for failing to register, but a large part of it they say is tax on his earnings and value of his flat in the UK.

We cannot understand how he can be taxed twice on earned income as surely there is a double taxation treaty between the UK and Italy and he has already paid all applicable tax on his UK earnings. He lives in his flat and does not "earn" from it.

He is very worried. Is there anyone please who has expertise in this area who can offer any guidance or links to any useful information as to whether there are grounds to challenge this penalty from the Italian government?

Many thanks in advance.

Joined:Fri May 16, 2014 3:47 pm

Re: Italian AIRE Tax/Penalty help/advice

Postby AGoodman » Mon Dec 20, 2021 1:14 pm

He needs advice from an Italian adviser as the penalty was levied under Italian law. I suspect you will not get that here.

I'm not sure the DTT will help if the penalty is for not filing rather than a tax itself.

Lost in Bureaucracy
Joined:Thu Dec 16, 2021 10:40 am

Re: Italian AIRE Tax/Penalty help/advice

Postby Lost in Bureaucracy » Thu Dec 23, 2021 8:19 am


Thank you for your helpful reply. Yes, my partner is trying to seek some advice on this within Italy as well.

We agree that the penalty element is legitimate as he should have complied with the AIRE registration conditions (had he known about them), so do not seek to challenge that. but that is a small percentage of the tax they are also trying to claim on his UK earned income, on which he has already paid UK PAYE income tax.

Separately, may I please ask another question: as he is now in the process of complying with the Italian AIRE requirements, this will mean Italy will now register him as an Italian living abroad. He had maintained a small Italian bank account (with nominal money in it and mainly as a convenience to have an Italian Euro account for when he goes back to Italy on holidays). Does he have to submit a UK self assessment tax return to declare the existence of this Italian bank account (even though it has only a nominal amount in it and doesn't earn interest etc)? If so, he is minded to just close that Italian account to save the hassle of having to submit an annual UK self assessment tax return, because all his UK earnings are from employed/PAYE earnings through his employer.

many thanks again.

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