Freelancer relocating to Italy vs Poland

[daibhead]

@dbtngbeliever Interesting. Is the relief well laid out in English by the Italian government? I think I read about its cons somewhere. Do you know offshorecorptalk forum? It’s one of the best forums about banking, tax optimizations, discussing those tax relief programs etc. I would suggest searching about this Italian scheme. I am also on 8.5% in Poland (IT tester), so if you have any specific questions let me know.

 

[dbtngbeliever]

@daibhead A consulting with Italian lawyer confirmed. Italy scheme can be even near 0 % (tax no social contributions) because you can pass a lot a business expenses & personal expenses (rent & family, medicare)

For Poland :

• Is it as I think, a 8.5% on turnover so no reason to have business expenses ?
• How much ZUS you can deduct from the turnover taxable by 8.5%?
• Do you pay ZUS Sole Proprietorship + ZUS Lump Sum or both equals around 300 EUR month when using 2 year preferential
• Is the accounting turnover based on Invoice sending date / Payment received date ?
• Tax & ZUS are to be paid at which frequency ? If client payment has 60 days, you have to prepaid the tax & zus before receiving the payment ?
• How are tax & ZUS payment done ? Automatic payment when you click the yes button on the government website ? (Like France & UK) or manual transfer order (Like Bulgaria & Romania)

Is it incredible that Poland renting has similar price than Italy while grocery price are cheaper by half. otherwise Poland building looks way more modern

 

[daibhead]

@dbtngbeliever

1. Yes, you are correct. It’s 8.5% on turnover and business expenses are not deductible.
2. Not much, I believe something like 40% of ZUS can be deducted.
3. You don’t pay any lump sum for ZUS. You pay it on a monthly basis. You start with preferential rate valid for 6 months for new start ups EUR 80 or something and it goes up to a maximum EUR 250 a month. However it all depends on the turnover amount, so you may as well reach highest threshold earlier than 6 months.
4. The accounting turnover is based on the date of the invoice issued. The FX rate for tax calculation is taken of the previous closing day from NBP (PL central bank). Then there is another FX calculation once you receive the payment. The FX loss can be deducted against tax, if it’s a gain then on FX difference you have to pay tax on profits (8.5%).
5. You always pay taxes and ZUS until 20 of each month for the previous month activity.
6. You have to do it via manual bank transfer. Accountant will send you ZUS and taxes amount to be paid on respective bank accounts assigned to you.

Yes, grocery is cheap in Poland but rents comparable.

 

[parkerjwill]

@dbtngbeliever Your italy math is wrong. It's 26% on net, not 26% on the 2.6 base. The reduction does not effect social security. You will end up paying closer to 60k in tax

 

[dbtngbeliever]

@parkerjwill Hello

Law bill on June 2023 has confirmed that it is based on the reduced tax base and not the whole turn over

The social contributions applys in regime impatriati in south italy, to 10% of the turnover, tax apply to this minus the social contributions

Taxable reduction gross = 20 000

Social contributions 26% = 5 200

Final tax = (20 000 - 5 200) = 14 800 * 0.23 (1st tax bracket) = 3 404 EUR

The tax can still be lowered by business expenses & tax credits available for the country

 

[parkerjwill]

@dbtngbeliever wow, that's actually incredible. your effective rate is 3% for 5-10 years. i can't believe it. I guess i'm moving to sicily

 

[hatheinee]

@parkerjwill You have to commit to live 2 year or you will have to paid back as normal income tax

 

[beatuscredo]

@parkerjwill Yes, actually Italy is amazing for doing business as Digital Nomads

 

[parkerjwill]

@dbtngbeliever I found an caveat

https://www.melieassociati.it/attenzione-ai-limiti-de-minimis-anche-per-impatriati-e-ricercatori/

you have a limit of reduction to 200k euros per 3 years. I'm not sure the exact numbers but I estimate it would only work if your income is below 150k euros/year

 

[traceyhig]

@parkerjwill Is this true? seems like a big limitation

 

[parkerjwill]

@traceyhig https://ntplusdiritto.ilsole24ore.c...-stato-questione-chiusa-ancora-aperta-AFJ5dTg

you can read this. it may be that the 200k limitation does not apply, but it seems like it's currently up for debate whether this would be considered selective 'state aid'

as it stood, it was also unclear whether the reduction applied so social security and it took a few years for a resolution to that question

 

[traceyhig]

@parkerjwill Thanks for the article. I had thought about Portuguese NHR when I learned about de minimis rule, why would one be considered stated aid and the other not.

 

[princedivine]

@dbtngbeliever Hi, can you please share some sources on all of that? Because it sounds too good to be true. Are you using any law firms or advisors to confirm all that?

 

[mrplain]

@dbtngbeliever "Law bill on June 2023 has confirmed that it is based on the reduced tax base and not the whole turn over"

Truly? Can you please provide a source. This would be amazing news to me!

 

[bebehappy]

@dbtngbeliever Hey OP, have you decided on any of this options so far?

 

[sadmama]

@dbtngbeliever I am looking for someone that can Manually retype my documents from PDF to Ms word for a good pay
dm if interested for more information on telgram Erena_Jon