The Italian tax system can be a labyrinth of regulations, forms, and obligations, especially for individuals who rent their properties on platforms like Airbnb. Fortunately, Italy offers a simplified tax regime known as the “Regime Forfettario,” which can provide substantial advantages to those involved in short-term property rentals. In this comprehensive guide, we’ll delve deep into the world of the Regime Forfettario, explore its eligibility requirements, understand its tax benefits, and discover how it can make a significant difference for Airbnb hosts.
Understanding the Regime Forfettario
The “Regime Forfettario” is one of three tax regimes available to individuals with a Partita Iva, or VAT number, in Italy. It’s often regarded as the regime of choice for many due to its simplified tax and accounting procedures. But how does it apply to Airbnb hosts?
To access the Regime Forfettario as an Airbnb host, you must meet specific eligibility criteria. First and foremost, your business activities, which include renting out your property, must be regular and organized. This means you are engaged in activities such as tourist rentals (locazioni turistiche), bed and breakfasts, guesthouses (affittacamere), or vacation rentals (case vacanze).
Annual Revenue Limit
One critical eligibility factor is the annual revenue limit. You must ensure that your total annual revenue from your business activities with a Partita Iva does not exceed €85,000. This revenue threshold is a significant determining factor for those considering the Regime Forfettario. If you surpass this limit, you may need to explore other tax regimes.
Ateco Codes (Codice Ateco): Deciphering Your Business Activity
When opening your Partita Iva, you’ll be asked to specify the Ateco code that corresponds to your business activity. This code is crucial, as it helps the tax authorities categorize and understand your business. For Airbnb hosts, there are specific Ateco codes that apply:
- 55.20.51 – Affittacamere per brevi soggiorni, case ed appartamenti per vacanze, bed and breakfast, residence: This code encompasses activities like offering short-term accommodations, chalets, villas, apartments, or bungalows for vacation rentals. It also includes cottages without additional services like daily linen changes or cleaning. The profitability coefficient for this Ateco code is set at 40%.
- 68.20.01 – Locazione immobiliare di beni propri o in leasing (affitto): This code covers property leasing, whether it’s properties owned by you or acquired through leasing agreements. It applies to residential and non-residential buildings, exhibition halls, storage facilities, commercial centers, and more. The profitability coefficient for this Ateco code is 86%.
Understanding these Ateco codes is essential as they determine the specific rules and regulations that apply to your business activity.
Distinguishing Between Ateco Codes
The primary distinction between the two Ateco codes lies in the nature of the activities they encompass. The first set of activities, under Ateco code 55.20.51, is considered extrahotelier, meaning they are regulated by regional and municipal authorities. In contrast, the second set of activities, under Ateco code 68.20.01, pertains to property leasing and is governed by the Civil Code.
A key difference between the two lies in the absence of ancillary services in property leasing, such as daily linen changes, in-stay cleaning, and breakfast services. This distinction has significant implications for your tax obligations.
Tax Benefits of the Regime Forfettario
Now that we’ve established who can access the Regime Forfettario and how to determine your Ateco code, let’s delve into the tax benefits this regime offers:
1. Simplified Taxation:
The Regime Forfettario streamlines your tax obligations. Instead of dealing with multiple taxes like IRPEF (the personal income tax), Irap, regional add-ons, and municipal taxes, you’ll be subject to a single, fixed substitute tax rate. This rate can either be 15% or, in some cases, as low as 5% for the first five years of your activity.
2. Accounting Simplifications:
From an accounting perspective, the Regime Forfettario brings significant relief. Here are some of the key accounting simplifications you’ll enjoy:
- No requirement for electronic invoicing.
- No application of withholding tax.
- No need to charge VAT on your invoices (although you won’t be able to deduct VAT on your purchases).
- Exemption from the obligation to record invoices and receipts.
These accounting simplifications can save you both time and money, allowing you to focus on your hosting business.
Contributions and the INPS
Contributions are a critical aspect of your tax obligations as an Airbnb host. The term “contributions” refers to mandatory taxes collected by the government from taxpayers. In Italy, the INPS (Istituto Nazionale della Previdenza Sociale) handles social security and pension contributions.
If you’re running an affittacamere business, you are required to register with the INPS under the “Gestione Commercianti” category. Typically, individuals registered in the “Gestione Artigiani e Commercianti Inps” are obligated to pay a fixed minimum contribution of approximately €3,940 per year, even if they earn no income.
However, there’s a notable exception for Airbnb hosts engaged in affittacamere activities. You are exempt from paying the fixed minimum contribution. Instead, you’ll only be required to pay a percentage of your gross income, specifically 24%, calculated by applying the profitability coefficient to your revenue from your Partita Iva.
Additionally, you can benefit from a 35% reduction in mandatory contributions, which is available for Artisans and Merchants operating within the Regime Forfettario. You can apply for this reduction through a specific request to the INPS.
In conclusion, the Regime Forfettario offers Airbnb hosts in Italy a simplified and advantageous tax framework. By meeting the eligibility criteria, understanding your Ateco code, and leveraging the tax benefits it offers, you can optimize your tax position and devote more resources to growing your Airbnb business. Remember that while the Regime Forfettario can be incredibly beneficial, it’s essential to stay informed about any changes in tax regulations and seek professional advice when necessary.
The key to successfully navigating Italy’s tax landscape as an Airbnb host is to stay informed, plan your tax strategy effectively, and ensure compliance with the relevant regulations. By doing so, you can make the most of your Airbnb venture while minimizing your tax burden.