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News: Italy introduces yet more taxes

Italian Prime Minister Romani Prodi has reintroduced succession tax and altered the tax rules for gifts, reports The Italian magazine...

The Italian Magazine reports in its December 2006 edition that Italian Prime Minister Romani Prodi reintroduced succession tax and altered the tax rules for gifts at the beginning of October 2006.

Both succession tax and gift tax (which relates to gifts exchanged between relatives during their lifetimes) were abolished in Italy in 2001.  But gifts will now be taxed at four, six or eight per cent.

Since his election in April this year, Prodi has demonstrated a penchant for raising taxes.  In July 2006, Decree 223 came into force making changes to Italy's VAT regime.  According to research institute Scenari Immobiliari, the new decree had a large negative impact on the country's real estate market as a whole.

In September 2006, Overseas Property Professional reported that Italy's new transfer tax was worrying many of Italy's property firms because it would raise the tax burden on real estate  transactions in Italy to well above the European average - to between 6 and 7 per cent in comparison to the European average of 3.3 per cent.  Many observers were concerned this move would deter large institutional investors from investing in the country.

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