Withholding taxes for Non-Residents

A quick explainer regarding Withholding Taxes for Non-Residents … and how to avoid them

The Italian government likes people to pay taxes. It is super-proactive to limit tax avoidance.

So if a person works in Italy as a freelancer and says “I live in a foreign country, so I pay tax there” The Italian tax authority is initially a bit suspicious. It wants proof that tax is being paid somewhere. Hence the request for a certificate of fiscal residence.

If you don’t supply a certificate, the Italian tax authority will assume that you don’t pay tax anywhere else and so it will apply a withholding tax of 30% to your invoice.

What you have to do:

  • Get a certificate of fiscal residency. Fill in a form with your respective tax authority (eg. HRMC for the UK, Agencia Tributaria for Spain) to request a certificate.
  • Send the certificate to Smarter English and we will attach it to your invoice.
  • And everyone is happy.

How long will I have to wait for a certificate?

This depends on the individual tax authorities, the information you are able to give them. But it shouldn’t be more than 2 weeks.

So how does this affect my payment?

We will pay 70% of the balance as soon as we receive your invoice.
The remaining 30% will be paid upon receipt of the certificate.

If you can send us the certificate along with your invoice, we can pay it all as a lump sum.

Why not just pay me the full amount now? (I’ll send you the certificate when it arrives)

I’m sure you will. But I am dealing with 80 teachers. And once the full amount is paid, the incentive to follow up on the paperwork disappears.

I am confused about filling in the form. Can you help?

Yes. Please share your questions and problems via email. Please include screenshots if possible. We will also build an FAQ for different forms from different tax authorities. based on the questions and problems which are commonly posed/reported.

check out the pages below for the FAQ’s so far.

  • UK
  • Spain
  • Poland (no FAQ, yet. but send us questions and we’ll get started)