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Taxes related death

Yesterday, we were talking about the death tax.

The former senator of the PD, Stefano Vaccari, proposed a law to better organize the funeral activity but it has been frozen due to the urgency of more serious measures, such as the vaccines.

The law, examined by the Hygiene and Health Commission of the Senate, targeted tax evaders.

“It’s a set of rules with which we want that many companies go out from the not legally and they can emerge from the black”. “So that, companies will have more responsibilities, not citizens “- explains Vaccari

The legal text contains:

  • the application of 10% VAT to funeral expenses;
  • a fixed fee of 30 Euro to be paid for each funeral, money useful for financing the supervision and control of cemeteries;
  • the increase in the income tax deduction limit for funeral expenses, which rose from 1,500 to 7,500 Euro;
  • new requirements for funeral homes;
  • for the Municipalities, the obligation to pay at least 20% of TASI for the maintenance of monumental cemeteries.

Are there taxes related to death?

Yes.  In Italy, these are the inheritance tax and the tax deduction for funeral expenses.

What is the inheritance tax?

Inheritance tax is a tax that affects the transfer of property and other rights to movable and immovable property, following the death of the owner.

The assets and rights belonging to the deceased, are the object of the succession that is transferred to the heirs, according to the rules of legitimate succession or according to the provisions indicated in the will. The sum of all the assets constitutes the hereditary that falls into inheritance.

Who has to pay the inheritance tax?

The inheritance tax is paid by all those who accept the inheritance, not by all the heirs and is liquidated on the basis of the assets of the estate, net of liabilities.

Let’s make an example …

If a person is dying and he leaves a bank account of ten thousand Euro and he also has a house worth two hundred Euro but he has a debt for the tax collection of twenty thousand Euro, the assets will be equal to one hundred ninety thousand: 10 thousand + 200 thousand – 20 thousand.

The deduction of funeral expenses.

From 2018, funeral expenses are deductible from the tax return declared by the taxpayers. They are entered directly by the Revenue Agency, in the pre-compiled 730 models together with medical, health and education expenses.

 The spending limit is 1,550 Euro

How to calculate the deduction?

  • the deduction percentage to be applied to expenses is 19%;
  • the maximum spending limit on 19% is 1550 Euro;
  • 19% of 1550 is equal to 294.5 Euro and this is the maximum expense that taxpayers can deduct in their income tax returns.

In other words, funeral expenses are deductible at 19% for a maximum expenditure of € 1,550, which can be deducted up to € 294.5.



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