Tax documentation in Italian style may seem like a novelty at first, but it is no longer that foreign to the American businessperson which is inconceivable without the 1099 tax form. No, this is not because Italian government officials have just been found to be better and more ethical than those in the US. Rather, it is because the Italian economy is stronger and more competitive than ours.
In many ways, we are following in their footsteps. Especially in taxation, we spend far more money than the EU countries, but if you go into any city in Italy, you will see that they do it differently than we do. By Italian style, we mean the way it is done.
Imagine an individual company in Italy. It is composed of several members, some with more formal jobs than others. When your company files a tax return, you will be instructed on how to file it. Because you work for many different companies and individuals, you must understand the tax laws of each country.
Do you have all the tax regulations explained in an easy to understand way? If you need help, your agent will probably have plenty of reading material to study and prepare you for the forms. To the best of our knowledge, Italy has not had such tax preparation services as those available in the US and Canada.
Then, when you are finished, you go to file your tax return. The US income tax system is not set up to allow a non-resident to file one, whereas it is a lot easier for Italian citizens to file their own.
The company’s return is then examined by a professional tax preparer and these are referred to as the Revenue officers. They will then scrutinize your return and make sure that you meet the criteria for paying the correct amount. Then, another round of examination by the Revenue Officer will take place. When the tax returned looks like it was filled out correctly, the company is allowed to pay the correct amount to the government. The exact sum depends on what tax evasion and/or fraud has been committed by the company.
The tax method used by the Revenue officers is not the same as what is used by small or large business. It is better suited to large companies and organizations, because it would be rather difficult for them to cheat on their taxes. The same goes for individuals who may be involved in non-profit or charity work.
The company’s agent will not only tell you how to file your return, but also offer tax instructions in Italian style. Usually, the agent will bring a dictionary and ask you to fill in the missing words. Even though this seems like an unusual procedure, it is becoming more common in Italy.
Another interesting feature of the tax system in Italy is that you can actually consult with a tax lawyer before you file your return. Many times, a tax attorney will find certain problems in your return and have you fix them before you submit it. Some of these problems are detected by analyzing your personal tax return and your business return.
Finally, once you have submitted your return, you are also able to consult with a business representative who will help you fill out any tax forms or vouchers which you may be required to fill out. It will also be advised by the representative whether or not you should pay the tax due to the government.
Tax instructions in Italian style is a must for anyone who wants to file a tax return. In most cases, you are required to fill out a tax form once per year, so this will give you a chance to familiarize yourself with the Italian tax system.
