International tax law
Cross-border tax advisory
Do you live, work or invest across borders? We clarify your tax obligations in Italy and align the treatment of your income with the rules of the other country.
Service area International tax law
What matters to you
Cross-border situations are part of everyday life in South Tyrol: entrepreneurs supply customers in Germany, employees work in Switzerland, families own flats in Austria or receive a German pension. Each of these cases raises the question of which country may tax and to what extent.
The answers result from the interplay between Italian tax law, the law of the other country and the applicable double taxation treaty. We look at your case as a whole and, where necessary, coordinate with colleagues from the ECOVIS network in the other country.
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Tax residence as the starting point
Anyone who is tax resident in Italy is in principle taxed there on their worldwide income. Under Italian law, relevant factors include registration in the register of the resident population (Anagrafe), domicile, the place of personal and family ties and physical presence for the greater part of the year.
These criteria have been redefined in recent years and do not always match the rules of the other country. If someone is regarded as resident in both countries, the tie-breaker rules of the double tax treaty decide. A thorough review at the outset avoids later disputes with two tax administrations.
Avoiding double taxation
Italy has concluded double taxation agreements with Germany, Austria and Switzerland. They determine which state may tax, for example, employment income, pensions, rents, dividends or capital gains. Whether Italy exempts the income or credits the tax paid abroad depends on the type of income.
Credit for foreign taxes is subject to conditions and supporting evidence. We check which taxes can be taken into account and which documents are required.
- Employees working abroad and cross-border commuters
- Recipients of foreign pensions and annuities
- Self-employed people and businesses with clients across the border
- Private individuals with investments or real estate abroad
Reporting obligations for foreign assets
Foreign assets can trigger reporting obligations and additional taxes in Italy. We check whether accounts, securities portfolios, shareholdings or properties must be declared and whether IVIE or IVAFE is due, taking into account exemptions, thresholds and the relevant return forms.
If these disclosures are omitted, substantial penalties may apply, even if everything was taxed correctly abroad. We review your documents, record the values and take into account any credits for foreign wealth taxes.
What to watch out for
Common problems arise when a move is not documented, deregistration in the country of origin is overlooked or a foreign bank provides documents only in a foreign language. Social security also follows its own rules: within the EU and in relation to Switzerland, European coordination rules determine where contributions are payable.
We point out such issues early so that decisions such as a move, a new employment contract or buying a home are prepared from a tax perspective.
Step by step
How we work together
Initial meeting
You describe your situation to us: where you live and work and what income or assets you have abroad.
Analysis
We review residence, tax treaties and reporting obligations and show you which taxes are due where.
Implementation
We prepare your Italian returns, claim tax credits and coordinate with the adviser in the other country where needed.
Ongoing support
If anything changes, for example a move, a new employer or an inheritance, we adapt the tax solution in good time.
Frequently asked questions
Answers on residence, foreign income and reporting obligations.
I live in South Tyrol and work in Austria. Where do I pay tax?
We first review your tax residence and your specific employment situation. In addition to the general rules for employment income, special cross-border commuter rules may apply. This determines which country has the right to tax and how double taxation is avoided.
Do I have to declare my German bank account in Italy?
If you are tax resident in Italy, generally yes. Foreign accounts and securities portfolios are reported in form RW, and IVAFE may be due on their value. Income from them is also subject to income tax in Italy.
What happens if both countries consider me resident?
In that case, the double taxation treaty determines which country you are assigned to, for example on the basis of your permanent home or centre of vital interests. It is important to document the relevant circumstances carefully. In the event of a dispute, mutual agreement procedures between the countries are available.
Do you work with my tax adviser abroad?
Yes. We are happy to coordinate with your existing adviser. If you do not have one, we can involve colleagues in the relevant country through the ECOVIS network.
How can we help you?
In the initial meeting, we clarify your request and discuss what support you need.