Glossario Termini Fiscali, Glossary of Tax Terminology
A practical Dictionary of Tax Terminology




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DEBITO D’IMPOSTA - TAX DEBT

Sum that the taxpayer is obliged to pay when the conditions set by tax law occur.

Sometimes it is determined as a fixed amount but more often it is calculated by applying the tax rate to the taxable base.

DECADENZA - LAPSE

Loss of the right because it was not exercised within a certain deadline.

In the tax field, limitation terms are frequent, such as for example for the proposition of an appeal to the Tax Commissions or in order to avail oneself of concessions, such as voluntary correction of tax return, acceptance, and composition.

DEDUZIONE PER ABITAZIONE PRINCIPALE - DEDUCTION FOR MAIN RESIDENCE

The possibility to subtract from the aggregate income the amount corresponding to the value of the main residence and of its outbuildings. With this deduction the first house is thus made practically exempt from Irpef.

The deduction is also within the taxpayer’s right when the building represents the main residence only of his/her family members.
It is granted only for one building unit, therefore if the taxpayer possesses two buildings, one intended for his/her own main residence and one used by a family member, the deduction is granted exclusively for the income of the building used personally by the taxpayer.

The deduction is also due when the habitual residence is transferred following the permanent admission to a hospital or other health institution, as long as the building unit is not rented.

DEDUZIONI - DEDUCTIBLE EXPENSES

Expenses that, by law, can be deducted from the aggregate income (see also deductions).

The main deductible expenses are: social and insurance contributions paid in compliance with legislative dispositions, periodic cheques paid to a legally separated spouse, spontaneous donations in favour of religious institutions, medical expenses and specific assistance expenses for disabled people, etc.

Deductibility is granted on condition that the expenses are paid by the taxpayer and have remained his/her responsibility for the entire tax period.

DEDUZIONI - DEDUCTIONS

Expenses that can be subtracted from the aggregate income, with an advantage related to the marginal rate reached by the taxpayer. They differ way from detractions, which lower the tax due.

Expenses that can be deducted from the income are:
  • general medical expenses and expenses for the special assistance of disabled persons
  • compulsory and some voluntary social and insurance contributions
  • contributions for complementary welfare and for premiums and contributions paid to individual pension schemes
  • welfare contributions paid for personal or family carers and for home helps
  • donations to religious institutions
  • monthly cheques to the separated or divorced spouse
  • periodic cheques paid on the basis of a will or gift by contract
  • subsistence allowances ordered by the judge and paid to the family members as per art. 433 of the Italian Civil Code
  • contributions to obligatory consortiums
  • contributions for developing countries (see the list on the website of the Ministry of Foreign Affairs www.esteri.it)
  • contributions paid to the supplementary funds of the National Health System
  • rents
  • indemnities for loss of starter value paid to the tenant by law
  • sums paid to employees called to carry out election functions
  • sums returned to the withholding agent, if previously subjected to tax
  • 50% of expenses sustained by adoptive parents for the adoption of foreign minors, provided they are certified by the organisations authorised to arrange the relative procedures (a list can be found at the following website: www.giustizia.it)
  • sums paid as a donation for the payment of the legal expenses of those individuals who have been admitted to benefit from free legal representation.

DETRAZIONI - DETRACTIONS

Concessions consisting in the possibility of subtracting certain sums from the gross tax.

In particular, detractions are due to taxpayers who have dependant family members or who possess income deriving from subordinate work or pension, self-employed or freelance work or small businesses.

The following items also give the right to tax detraction, to the fixed amount of 19%:
  • medical expenses (for amounts higher than 129.11 euro)
  • expenses incurred for the purchase of vehicles, technical and technological equipment and other assistance instruments for disabled people
  • interests paid on loans taken out for the purchase of the main residence or for refurbishment agreed in 1997, interests paid on mortgages taken out starting from 1998 for the building and refurbishment of the main residence
  • interests paid for agricultural loans and mortgages
  • funeral expenses
  • school fees
  • insurance premiums for life and against accidents (for policies drawn up until 2000)
  • premiums for insurances to insure against death, permanent invalidity not less than 5% or leading to the absence of self-sufficiency in carrying out every day activities (contracts agreed or renewed from 1st January 2001)
  • veterinary expenses
  • expenses for the conservation of historical and artistic heritage
  • donations for the performing arts and/or opera houses
  • donations for cultural and artistic activities
  • donations to Onlus organisations (non-profit organizations for social welfare)
  • donations to associations of social assistance
  • donations to political parties and associations
  • contributions paid to mutual friendly societies
  • donations to “Società di cultura La Biennale” in Venice
  • donations to amateur sport associations
  • payments made to real estate agents for purchasing the main residence
  • expenses encountered for the annual enrolment fee and membership of sport associations, gymnasiums, swimming pools and other structures and sport facilities intended for amateur sport activities of youngsters aged from 5 to 18 (up to a maximum of euro 210.00)
  • lease contracts entered into by students enrolled in a degree course at a university located in a different municipality from where they have their residence address
  • expenses (up to a maximum of euro 2.100,00) encountered for personal carers in situations where there is no self-sufficiency in carrying out everyday activities.

DICHIARANTE - DECLARANT

The person who presents the income tax return.

DICHIARAZIONE CONGIUNTA - JOINT TAX RETURN

Possibility allowed to married couples who submit the income tax return by using the 730 form to complete only one tax return when certain conditions occur.

DICHIARAZIONE CORRETTIVA (entro i termini) - CORRECTIVE TAX RETURN (WITHIN THE DEADLINES)

Tax return rectifying the Modello unico form previously submitted, which can be transmitted by taxpayers who realise that they have omitted to declare some sources of income or some detractable or deductible expenses (provided this is done within the deadline for submitting the tax return).

On the form the specific box ‘Correction within the deadlines’ must be ticked.

If the new calculations of the corrective tax return result in a higher tax or a lower credit, the taxpayer must pay the due sums within the deadlines established. If the result is a higher credit or a lower tax, he can opt to request a reimbursement or to carry it over as credit for the following year, or he can use it in compensation(see also Supplementary Declaration).

DICHIARAZIONE DEI REDDITI - INCOME TAX RETURN

The document with which the taxpayer states his/her income.

The tax return must be submitted by all individuals who registered an income the previous year (entrepreneurs and those practising a craft or profession must submit it even if they did not receive any income), by using the forms provided every year by the Revenue Agency.

The forms vary depending on whether the tax return concerns natural persons, partnerships or corporations.

For natural persons, the form to be used can be the standard tax return form or – if the declarant is an employee or pensioner – the 730 form.

DICHIARAZIONE DEI REDDITI (con il modello 730) - INCOME TAX RETURN (WITH THE 730 FORM)

Simplified form of tax return that employees, persons working with CO.CO.CO contracts and pensioners can submit to their employer or pension trust or to one of the specific Fiscal Assistance Centres (CAF) formed by the trade unions or employers.

All the necessary documentation must be submitted to the CAF - which can also complete the tax return in exchange for a payment.

This obligation exists even if the tax return submitted to the CAF is already completed. The addresses of the regional CAF are available on the website of the Revenue Agency (www.agenziaentrate.it).

The use of the 730 form has considerable advantages:
  • it is easier to complete and does not require calculations; the taxpayer doesn’t even need to worry that the tax return reaches the Revenue Agency. All this is the responsibility of the employer or of the pension trust or of the CAF to which the taxpayer refers
  • the taxpayer obtains the reimbursement of any tax that may have been overcharged, directly with his/her pay slip or in the pension instalment for the month of July (for pensioners who receive their pension in instalments every two months the reimbursement is carried out starting from August or September). In case of paying outstanding amounts, these will be withheld directly from the salary or pension. If the salary or pension is not sufficient for the payment, the remaining part, increased by the monthly interest, will be withheld from the amounts due in the following months. The taxpayer can also request (by completing a specific box in the tax return form) to divide the deductions into monthly instalments, paying an interest of 0.5% per month. 
The 730 form cannot be used by individuals who possess business income and income deriving from the practice of crafts and professions. These individuals must submit the tax return using the Modello Unico form.

From 2014, the 730 form can also be used by taxpayers, employees and assimilated, without a withholding agent required to effect the balance (excluding some income assimilated to those of employees, such as the allowance received by members of the European Parliament). In this case, refund is paid directly by the Revenue Agency.

DICHIARAZIONE DEI REDDITI (CON IL MODELLO UNICO) TAX RETURN (WITH THE MODELLO UNICO FORM)

Standard form of tax return that includes, as well as the tax return, the annual declaration of VAT taxpayers and the Italian Regional Tax on Productive Activities (Irap) declaration.

For methods of presentation, see the entry submission of the income tax return (Modello Unico Form).

DICHIARAZIONE DEI SOSTITUTI D’IMPOSTA - WITHHOLDING AGENTS’ TAX RETURN

Tax return with which the employer communicates the overall amount of the payments and of other sums made to his/her employees and to the independent collaborators who have carried out activities for the company, as well as the amount of the substitute taxes and of the withholding taxes made on different incomes and on capital gains (see also 770 Form).

DICHIARAZIONE ICI - ICI DECLARATION

The declaration that the taxpayer, within the deadline for submitting his/her tax return, must submit to the Municipality where the buildings he/she owns are located, and for which variations during the previous year occurred. It must be submitted directly to the Municipality or sent by registered post without receipt of delivery to the council tax office.

DICHIARAZIONE TRAMITE INTERMEDIARIO - INCOME TAX RETURN THROUGH AN INTERMEDIARY

Tax return using the Modello Unico form, submitted through certified public accountants, CAF and other professionally qualified individuals.

If the tax return has been prepared by the taxpayer, the intermediary responsible for its Internet submission must issue:
  • a declaration, appropriately dated and signed, proving he/she has taken responsibility to transmit via the Internet the information contained in the form
  • the original copy of the tax return, signed by the taxpayer and written on the form in conformity with the one approved by the Revenue Agency, within 30 days from the deadline envisaged for the Internet submission, together with the communication (so called “receipt”), that certifies that tax return has been received by the Revenue Agency. 
For the service of receiving and transmitting the tax returns, intermediaries can request a fee.
(see also Internet tax return submission).

DIFENSORI ABILITATI - QUALIFIED LEGAL COUNSEL

Individuals – generally listed in professional registers – who can represent and defend the taxpayer before the tax commissions.
In tax trials the assistance of a qualified legal counsel is compulsory when the value of the dispute is higher than euro 2,582.28; the “value” is the amount of tax, net of the interest and possible sanctions (if there are only sanctions, the value is given by the sum of these).

The category of qualified legal counsels includes, if they are listed in the respective professional registers, the following professionals:
  • lawyers
  • certified public accountants
  • book-keepers and qualified accountants
  • business consultants, for matters concerning deductions at source on income deriving from subordinate employment and similar and the relative obligations of the withholding agent
  • engineers, architects, surveyors, building experts, agronomists, agro-technicians and agricultural experts for matters concerning extension, classification of land and allocation of the assessable value, consistency, classification of the individual urban real estate units and assignment of the cadastral income
  • under certain conditions, also other categories among which officials of the Tax Administration and of the Finance Police retired after twenty years of service, qualified representatives of professional associations, employees of companies for the disputes that concern them.
Qualified legal counsels must be assigned the task by means of a public or private deed or even at the foot of or in the margin of a procedural deed; in this case the same individual certifies the signature.

To individuals with a low income, recognised as such by a specific Commission established at every Tax Commission, free assistance is guaranteed.

DIRITTI DEL CONTRIBUENTE - RIGHTS OF THE TAXPAYER

Prerogatives recognised by the Taxpayer’s Statute

DIRITTO DI ABITAZIONE - RIGHT OF RESIDENCE

Property right on the house intended for family residence and on its outbuildings to which the separated partner, in fact or by law, and the members of his/her family, are entitled.

The assignee who has been assigned accommodation in a public residential building, on the basis of an agreement of future sale or leasing, is also entitled.

The holder of the right of residence must pay the Ici and declare the income of the building as part of Irpef.

DIRITTO DI INTERPELLO - RIGHT OF QUESTIONING

(see: Questioning).

DOCUMENTO DI TRASPORTO - TRANSPORT DOCUMENT

Document that following the abolition of the waybill must be issued in the following cases:
  • whenever the deferred invoice is used; 
  • for the movement of goods for purposes other than the transfer of property (for example for processing, storage, gratuitous loan, etc.)..

DOMICILIO FISCALE - TAX DOMICILE (MUNICIPALITY OF)

For natural persons, the municipality where they are listed in the municipal register. For subjects other than individuals, the municipality where their legal office is based or, in the absence of this, their administrative office.

For non-resident individuals, the municipality where they have produced their income or highest income; for other non-resident subjects, the municipality in which they have established a secondary office or branch or some form of stable organisation and, in the absence of any of these, the municipality where they mainly carry out their business.

The transfer of residence, just as the transfer of legal offices, to a different municipality, automatically entails the transfer of the tax domicile, with effect from the sixtieth day. When certain circumstances occur, the transfer of the tax domicile can also occur on the Revenue Agency’s initiative or at the subject’s request.

DOPPIA IMPOSIZIONE - DOUBLE TAXATION

This occurs when the same income is taxed twice.

Tax legislation states that this is prohibited, even when it occurs with regard to various subjects under the same conditions.

Double taxation, which normally happens in international relations, is eliminated by national laws (such as, for example, the granting of a tax credit) and by specific international agreements for the avoidance of double taxation.

DRENAGGIO FISCALE - FISCAL DRAG

The increase in fiscal pressure due to inflation, even when there is no increase in real income or in rates.

Fiscal drag can be neutralized by adjusting the value of deductions and tax bands to the dynamics of inflation.

DIVIDENDI - DIVIDENDS

Shares of profit distributed to shareholders of joint stock companies and partnerships limited by shares.

Dividends are subject to deductions at source or to withholding tax. In some cases they also give right to a tax credit.

DIVIDEND WASHING

Transfer transactions of shares ‘profit included’, which allow to receive dividends on which the taxes have been lifted and to deduct capital losses incurred from sales.


AVVERTENZE D'UTILIZZO: Il presente glossario contiene una definizione dei termini più utilizzati in ambito fiscale in Italia, tradotti e spiegati in inglese dall'Agenzia delle Entrate.
La spiegazione di ciascuno dei termini indicati in questo glossario è di carattere meramente orientativo e priva di valore legale; si raccomanda, quindi, di tenere conto del contesto e dell'evento in cui essi vanno applicati, in quanto il significato loro attribuito potrebbe differire rispetto a quello qui rappresentato.

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