Occasional truffle hunter?
Complete Guide to Income Taxes for Truffle Hunters
If you are an occasional truffle hunter, it is important to understand the income taxes that apply to you. This article provides a detailed overview of the taxes and tax obligations you need to consider.
Substitute Tax
According to Article 1, paragraph 692 of Law 145/2018, income derived from the occasional collection of wild products falling under ATECO 02.30 is subject to a substitute tax of IRPEF and regional and municipal surtaxes, amounting to 100 euros. However, this tax only applies if the proceeds obtained from the sale of such products do not exceed 7,000 euros per year. It is important to note that this income is not aggregated with other personal income.
The tax must be paid by February 16th of the reference year by those who hold a collection permit issued by the Region or other competent bodies. Payment is made using F24 form "Payments with identification elements" and tax code 1853. Those who collect products exclusively for personal consumption are exempt from the tax.
Withholding Tax
Withholding tax does not apply to collectors who have already paid the 100 euro substitute tax as per Article 1, paragraph 692 of Law 145/2018. However, if you do not fall under this facilitated regime, entities acting as withholding agents must apply a 23% withholding tax on payments made to occasional truffle collectors, with an obligation to recover it. The taxable base is 78% of the amounts paid, net of a 22% flat-rate deduction for income production expenses. The withholding tax is paid using tax code "1040" on the F24 form.
VAT
According to Article 34-ter of Presidential Decree 633/72, occasional collectors of non-timber wild products under ATECO 02.30 and spontaneous medicinal plants are exempt from VAT and documentary and accounting obligations if their annual turnover does not exceed 7,000 euros. If you exceed this threshold, you will have to apply VAT according to ordinary rules. The VAT rate is 5% for fresh or refrigerated truffles and 10% for frozen, dried, or preserved truffles in salt water or other preserving substances.
Now that you have a clear understanding of income taxes for wild product collectors, you can manage your activity in an informed manner and in compliance with current tax laws.
Budget Law 2019: Substitute Tax for Occasional Truffle Hunters
The 2019 Budget Law introduced important changes for occasional collectors of non-timber wild products, such as truffles, mushrooms, berries, nuts, and spontaneous medicinal plants. These changes concern income taxes and VAT, and in this article, we will examine the main novelties.
Substitute Tax
According to Law 145/2018, income derived from the occasional collection of non-timber wild products falling under ATECO 02.30 is now subject to a substitute tax on IRPEF and related surtaxes. This tax is fixed and amounts to 100 euros. It must be paid by February 16th of the reference year by those who hold a collection permit for one or more products, issued by the Region or other competent bodies.
Withholding Tax
One of the main novelties concerns withholding tax. Those who have paid the 100 euro substitute tax, with reference to the year in which the product was sold, are exempt from the 23% withholding tax ordinarily provided for 78% of the proceeds.
Occasional Activity
The collection activity is considered occasional if the proceeds received from the sale of products do not exceed 7,000 euros per year and if this income is not aggregated with other personal income.
Changes in VAT
Regarding VAT, the 2019 Budget Law introduced some significant changes. Occasional collectors of non-timber wild products under ATECO 02.30 and spontaneous medicinal plants, who have generated a turnover not exceeding 7,000 euros in the previous calendar year, are now exempt from paying VAT and from all documentary and accounting obligations, including the annual declaration.
Furthermore, the VAT rate has been reduced from 10% to 5% for the sale of fresh or refrigerated truffles, while it has been set at 10% for frozen, dried, or preserved truffles in salt water or other preserving substances, but not prepared for immediate consumption.
Products not included in ATECO 02.30
Finally, paragraph 699 of the Budget Law stipulates that agricultural producers who manage the production of non-timber wild products, other than those included in ATECO 02.30, can apply the flat-rate regime. The income of such individuals is in any case determined on a cadastral basis, and certain specific provisions do not apply.
These changes have a significant impact on occasional collectors of non-timber wild products, simplifying tax procedures and reducing tax burden in certain situations. It is important to stay updated on tax laws and regulations to ensure compliance with the new regulations.