The tax rates, taxable value (base imponibile), and territorial criteria for tax application are more favorable than in many other countries
Inheritance tax is due on all transferred assets and rights, including those located abroad
Inheritance tax
In Italy inheritance tax is due on all transferred assets and rights, even if they are located abroad, as stipulated by Legislative Decree 346/90.
However, if the deceased was not a resident of Italy at the time of succession, the tax is only applicable to assets and rights present in Italy, including those registered in the public registers of the Italian State and the real rights associated with them.
Heirs and/or legatees must file the inheritance declaration within 12 months from the date of the succession opening, which coincides with the date of the taxpayer’s death.
The declaration can be submitted by non-residents either electronically or by sending a paper form via registered mail to the competent office of the Revenue Agency.
The competent office for the inheritance declaration depends on the deceased’s residence. If the deceased resided abroad (or their residence is unknown) and never resided in Italy, the declaration must be submitted to the “Territorial Office of Rome 6 – Eur – Torrino Provincial Directorate II of Rome”. If, however, the deceased resided in Italy before moving abroad, the competent office is the one of the last known residence in Italy.
Before completing the inheritance declaration, it is advisable to check whether Italy has concluded a double taxation agreement regarding inheritance tax with the deceased’s country of residence.
Applicable tax rates
The tax rates for inheritances and donations vary depending on the degree of kinship between the deceased and the beneficiary of the transfer (heir or legatee).
The applicable tax rates are as follows:
- 4%: for transfers in favor of the spouse or direct relatives (children, parents, grandchildren, etc.), to be applied to the net total value exceeding 1 million euros per beneficiary
6%: for transfers in favor of siblings, to be applied to the net total value exceeding 100,000.00 euros per beneficiary
- 6%: for transfers in favor of other relatives up to the 4th degree, direct in-laws, and collateral in-laws up to the 3rd degree, to be applied to the net total value of the inheritance, without any exemption
- 8%: for transfers in favor of all other subjects, to be applied to the net total value of the inheritance, without any exemption.
The tax rates and exemptions are applied individually to each beneficiary. For example, if an inheritance amounts to 3,000,000.00 euros, with two beneficiaries involved – a child entitled to 2,000,000.00 euros and a non-relative beneficiary entitled to 1,000,000.00 euros – the following taxes apply: • Child’s share: 2,000,000.00 euros – exemption 1,000,000.00 euros = taxable amount 1,000,000.00 euros x 4% = 40,000.00 euros. • Third-party share: 1,000,000.00 euros – no exemption = taxable amount 1,000,000.00 euros x 8% = 80,000.00 euros.
In summary, inheritance tax is due on all transferred assets and rights, including those located abroad. However, if the deceased was not a resident of Italy at the time of succession, the tax only applies to assets and rights present in Italy. It is crucial to comply with the deadlines and submit the declaration within 12 months from the date of succession opening. The declaration can be submitted electronically or in paper form, depending on the circumstances.
Remember to check if there is a double taxation agreement between Italy and the deceased’s country of residence.
The tax rates for inheritances vary based on the degree of kinship, and the exemptions are applied individually to each beneficiary.
