Freelancer relocating to Italy vs Poland

[dbtngbeliever]

Hello

After few weeks of intensive research, I am leaving Romania for either Italy South or Poland (I leave Romania because the tax situation is nighmare and unpredictable, by the way, the government try to pass a juridic stuff in order to be able to apply tax change basically within a month (vs 6 month today), so you can be in trouble if a tax reform is applicable mid year because the way you take out the money relies on dividend release done J+1 of the next year)

For a 200K example :

• Romania in 2024 will be 3% Turnover Tax + 3000 EUR annually for social contributions from employment + 8% Dividend Tax + 1750 EUR for dividend release social contributions = 200 000 * 0.97 - 3000 *0.92 - 1750 = 173 970
• Poland : 8.5 % Turnover Tax (IT Testers) + 3600 EUR Social contributions = 200 000 * 0.915 - 3600 = 179 400
• Italy : 90% Tax exemption South Italy + 26% Social contributions + 23% Personal tax = 200 000 - [(200 000 * 0.1 * 0.26) + (200 000 * 0.1 * (1 - 0.26) * 0.23) = 191 396

Italy give me 1450 € a month in comparison of Romania / Rent in Palerme & Bari are over 900 EUR for a nice 80m2 sea view

Poland give me 450 € a month in comparison of Romania / Rent in Warsaw & Krakow & Wroclaw are over 800 EUR for a nice 50m2

Any people living actually in Italy (Regime Impatriati) or Poland (Sole Proprietorship) have some downsides to share ?

 

[lovethechrist]

@dbtngbeliever I don't know too much about that but I think "Regime Impatriati" can last nearly 5 years, can be extend to another 5 with some specific considerations.
Have you done some researched about the taxation after that period?

 

[dbtngbeliever]

@lovethechrist I'd be already happy for 2 years, so 5 years is way better

After 5 years, the taxation is not longer good for me (no childs) and will be an another story

 

[ajewforjesus]

@dbtngbeliever Regime impatriati can also be partially extended by buying a house, if you're not interested in creating a family. 5 years are added on top of the first ones, but the tax exemption should no longer be 90% at that point (I believe it'll be 50%). You can ask on r/commercialisti if you need more info calculating your net salary. I would also recommend a post there in case you want to verify fiscal requirements: working as an independent contractor instead of a full time employee may not be treated equally.

My main concerns would be:

• language barrier in South Italy: mostly only younger people speak English, you may have issues dealing with many providers from landlords to banks
• infrastructure: moving to Palermo means being mostly stuck on the island (until they build the damn bridge, just keep in mind that's been a running joke since my grandfather's times). Not necessarily a downside but you'll need a car if you want to visit around and to leave Sicily you'll take a plane most times. Puglia is better connected to the overall train infrastructure so visiting Italy could be easier from there. Just don't expect the full fledged high speed trains until you get to Naples.

 

[ajewforjesus]

I just noticed your calculation again: taxation is not 10% but rather that's the part of income that gets taxed.
In the 200K example only 20k gets taxed:
- 15.000 gets taxed at 23%
- 15.000 to 20.000 gets taxed at 27% (unless the new tax law gets approved)

So that should give you a net of $194,750 excluding other contributions

 

[dbtngbeliever]

@ajewforjesus

Hello

Social contributions comes first and reduce the taxable base after 90% exemption

 

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[dbtngbeliever]

@ajewforjesus Hello

Thank you for your reply

I don't look at long term, just yearly scale.

Well Italian looks promising and easier to learn, as it is latin language,

I take into account Cagliari & Palermo situation, the mainland doesn't look well fitted to my situation, Napoli is nighmare price rent and Bari & Pescara are too small

 

[lovethechrist]

@dbtngbeliever

and will be an another story

More similar to a tax story.

I don't want to scare you but using this calculator (after the 5 years) you get around 110k net; maybe is totally wrong and I didn't fill in correctly though.

 

[dbtngbeliever]

@lovethechrist At this net outcome I will go back to my home country

I am a traveler, I am not afraid to switch countries every year as Romania is my 5th. I give me opportunity to long stay in a country and learn about his history, their values and to cut down clichés

 

[lovethechrist]

@dbtngbeliever You've a very positive spirit, you know no comfort zone; I think you'll be a millionaire pretty fast.

 

[wolfspirit]

@dbtngbeliever You can also extend it for another 5 years by buying property in Italy.

 

[dbtngbeliever]

@wolfspirit Could be nice for people who will live long term

I rather skip property as I prefer timeless investment

 

[txlove]

@dbtngbeliever Private entrepreneurship taxes in Poland are different for different tech jobs, manual testers with the lump sum indeed pay only 8.5% income tax, but software developers 12% and the HR people, people managers will pay 15%.
Accounting services are indeed 200-300 PLN per month, but also all those legal issues might cost you extra.

 

[dbtngbeliever]

@txlove I fall behind the IT Tests case lucky me

 

[odalex]

@dbtngbeliever Keep in mind that social tax grows every year because it based on average salary. Not that much, especially in your case, but it adds around 20-30 euro per month each year

 

[resjudicata]

@dbtngbeliever Do you need to stay in the EU?

Because you might also be eligible (you gotta check) to the Georgian 1% and it’s just across the black sea for Romania.

 

[dbtngbeliever]

@resjudicata I have a sleeping IE SBS in Georgia

I cannot work from outside GDPR right now

For now my client paid me more in EU taxation than foreign client where I can use Georgia 1%

 

[daibhead]

@dbtngbeliever It is fairly easy to communicate in English in Warsaw. I would normally pick Italy simply due to the weather, but I am not sure about communication skills in your places of consideration. Also isn’t the Italian tax relief temporary?

 

[dbtngbeliever]

@daibhead Thanks for sharing

The relief is for 5 years at minimum