February 1, 2023

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Discounted rate of 14% on investment income – Corriere.it

The frantic search for resources gives a fundamental change to the taxation of capital income in Italy. In order to receive income in 2023, The Budget Act provides savers and asset owners with an opportunity many will jump at: pay taxes almost instantly on capital income and settle in once and for all.. Thus, the maneuver opens many windows for structural reduction of fees on financial capital gains, of almost all kinds, provided that the taxpayer pays between June and September of next year even before the liquidation of his assets. If the investor earns more than these later, he will not have to pay anything: the state seeks revenue under the banner of the oligarchs, the damned and immediately.

Taxes from 26 to 14%

The news is contained in Articles 26 and 27 of the bill now in parliament. Section 26 expands the option to revalue the consistency of one’s assets to a much wider audience, by paying a reduced rate of 14%. Only those who own unlisted companies or build land – as is the case until now – will not be able to do this, but also those who have stocks, bonds or other securities in the financial markets. Basically, by June, you adjust what you own to the highest current value. And you no longer have to pay 26% on investment income when you sell your investment later.

In fact, the law is written in such a complex way that it lends itself to different interpretations. According to at least two major tax experts, the taxpayer gets away with paying 14% of all revalued assets. For example, those who invested 100 thousand euros in Tesla shares in 2019 today have an investment value of about 1400 euros; The settlement will be by paying 14% of the last amount. The Bank of Italy gave Parliament a more generous reading: All accounts with the tax authorities are settled by paying 14% only on profits made, not on the total value you own.

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Payments by September

On the other hand, the generous interpretation of Article 27 undoubtedly wins. And there is a modernity that cuts taxes on owners of capital income: Those with savings and assets in trusts or in certain insurance policies satisfy any current or future tax requirement by paying 14% — no longer the 26% required by law — on the amount gained from the investment made. The only requirement is that everything be paid out by September, even without selling the private equity in the funds or the securities in the portfolio. The government’s goal is precisely to raise money immediately: the accounting office estimates more than a billion in revenue from Section 26 and nearly half a billion from 27. But one effect of the measures is to halve or nearly halve taxes on capital income earners, though. Although the latter are already taxed much less than business income. The impact will be enormous because, according to Istat, about 700 billion euros are invested in Italy in mutual funds and about 1,200 billion in insurance policies.

Whoever has more wins

But it would be a disproportionate tax cut, de facto largely in favor of those with more. Simone Pellegrino of the University of Turin estimates that today the poorest half of the population in Italy owns 2.5% of assets, while the richest 10% own 56% of it. So it will be the richest who will benefit most from these rules. Meanwhile, spending on basic income, intended for the poorest tenth of the population, is cut by 700 million in 2023 and by 1 billion for the following years. After all, all basic income remains unaffected by inflation and is therefore partially unadjusted to price increases: in real terms, the average check falls by more than 10%. In all this, the budget law certainly does not help reduce disparities in Italy.

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