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IMMIGRATION

Migrants nearly as valuable to Italian economy as Fiat

A new study reveals that foreign workers in Italy contribute almost as much to the national economy as Fiat - Italy's biggest car manufacturer and one of the country's largest companies.

Published: 11 October 2016 15:34 CEST
Migrants nearly as valuable to Italian economy as Fiat
Migrants stand outside a centre for asylum seekers in Italy. Photo: AFP

More than 5 million foreigners live in Italy, as of January 1st 2016, making up 8.3 percent of the total population.

Between them, they fund the pensions of 640,000 Italians, according to a new report. This is particularly impressive since only 100,000 foreigners draw pensions themselves in Italy.

The report 'The economic impact of immigration' by the Leone Moressa Foundation, was presented to the Interior Ministry on Tuesday. Published annually, it measures the tax and social security contributions of migrants living in Italy, as well as their cost to the state.

In 2015, the new arrivals brought in over €7 billion in personal income tax and €11 billion in social security contributions.

In total, they contributed €126 billion to the national GDP, or 8.8 percent of the total, making them almost as valuable to the Italian economy as car manufacturer Fiat, which generates €136 billion each year.

The figure was up from last year, when the study calculated that immigrants brought in €123 billion.

As for their cost to the state, just 1.75 percent of public spending goes towards migrants; €15 billion in total. For comparison, Italy pays €70 billion in interest on debt each year, and spends €260 billion on pensions.

“Migration continues to bring benefits to the Italian system,” the foundation noted, singling out pension contributions as “one of the main benefits”.

Young migrants are an asset to ageing Italy

Most of the newcomers are young; 78.1 percent are of working age, compared to 63.2 percent of the Italian population as a whole.

And while Italy counts more than 16 million pensioners, only 100,000 of these are foreigners.

Italy also has the lowest birthrate in the EU, compounding the problem of an ageing population, and qualified youngsters are leaving the country in their droves. A study published last week warned of a “brain drain”, noting that Italians aged 18-34 made up over a third of emigrants in 2015.

READ ALSO: Why Italy is facing a 'birth rate apocalypse'

Young, working migrants therefore provide a much needed boost to the Italian economy. 

However, it wasn't all good news. The study also noted that two thirds of employed immigrants were working in low-skilled jobs, compared to around a third of Italian-born workers. Furthermore, households with at least one immigrant were much more likely to be living below the poverty line than native Italians.

 

For members

TAXES

Should you hire an accountant to file your Italian taxes?

Italy's tax system is notoriously complex. Can you realistically expect to navigate it yourself, or should you pay a professional?

Published: 21 March 2024 10:01 CET
Should you hire an accountant to file your Italian taxes?

The Italian tax system has a reputation for being particularly difficult to navigate. Don’t just take our word for it: the prime minister herself recently described her country’s tax rules as “illogical and vexatious… and quite useless too.”

But as you face the upcoming tax season you may be wondering: just how hard it can really be to manage your Italian tax affairs yourself? After all, this isn’t the most straightforward or pleasant task in any country.

READ ALSO: When are the deadlines for filing your Italian income tax return?

For Italy’s foreign residents, it’s frequently recommended that you seek help from an accountant or another tax professional, not least because the language barrier increases the risk of potentially costly mistakes.

The complexity of the system also means Italians themselves often seek professional advice on tax issues, particularly if their tax situation is at all complicated.

While the Italian inland revenue agency (Agenzie delle Entrate) has taken steps to simplify the process of filing a tax return in recent years, and even provides some Italian tax information in English, the tax forms themselves are not available in English and there’s a lot to understand about the rules.

When filing a tax return, getting professional advice can be particularly important if you’re making changes to the pre-filled sections of the 730 form, or if you’re self-employed and need to use the redditi PF form.

Find out more about these forms and the deadlines for filing them in 2024 here.

We asked readers whether they would recommend using an accountant over filing taxes yourself, and the majority agreed that, for them, professional help was worth the cost.

“There’s not a chance I would file my own taxes in Italy,” said self-employed British reader Greg in Lombardy. “The rules keep changing, it becomes very time-consuming.”

He pointed out that back in the UK most people do not need to file an annual income tax return, and said that as a result he thinks some British nationals in Italy tend to “underestimate” the difficulty and “think they can go the DIY route.”

“I see time and again people asking for advice [about taxes] on expat groups,” he said, adding that there’s a lot of “wrong information” being given in response.

“Not worth it. Just pay an accountant,” he advises.

READ ALSO: What is an Italian commercialista and do you really need one?

Janine in Tuscany said her commercialista (accountant) has saved her money. She has friends who have “tried to apply for some of the [tax] bonuses themselves but never heard anything back,” while her claims submitted by a professional were processed quickly.

“They know the ins and outs of the system and can just get things done,” she said.

Meanwhile, in a recent article on filing US and Italian taxes, some American readers told us they needed not one but two accountants – one in each country.

“Get professional tax advice for your specific situation. Know that double taxation is real, despite the existence of tax treaties,” advised one anonymous American reader who said they pay for professional help in order to avoid being audited in Italy.

READ ALSO: Reader question: Do US nationals in Italy have to pay taxes twice?

Others told us that, while they needed help with their American taxes, they found they were able to handle their Italian tax return themselves using software such as TurboTax.

Those who have hired a tax professional also stressed the importance of choosing someone with experience of handling international tax affairs.

“You will probably end up paying ‘expat rates’, especially if you need someone who speaks English,” said reader Nancy, from the US. “Make sure you get recommendations, make sure they understand your situation.”

If you have concerns about filing your own taxes in Italy, you don’t always have to pay for help.

Italy has a national network of tax assistance centres (Centro Assistenza Fiscale, or CAF) which provide free advice on tax matters and can also help you complete and file your tax return, submit claims for financial assistance, and more. Find your nearest office here – though be aware that not all staff will speak English, and they get very busy ahead of tax season.

If you’d prefer to look into hiring a tax professional, find out more about what exactly a commercialista can help with and how to find one in this article.

For general information on the tax requirements you may face, consult the tax agency (Agenzie delle Entrate). Find your nearest office here.

Please note that The Local is unable to advise on individual cases. Find more information on the Italian tax agency’s website (in English).

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