Guide to p2p loans income taxation
Italian p2p lending taxation rules
Since 2018 the income gained on peer to peer lending Italian platforms (like Smartika) are considered as financial income.
This news, for many of us, means lower taxation than we would have had before 2018 when these same profits were weighting our income and raising our taxes. They are now taxed at a fixed rate of 26%.
This small tax reduction could also help, in the near future, a further enlargement of the audience and a greater “institutionalization” of this type of investment in Italy, as already happened in the UK
European p2p lenfing taxation rules
For all the other non-Italian platforms which I invested on (Mintos, Grupeer, Envestio etc.) this rule does not apply. To declare these incomes, you will have to fill in the “G” box, 3rd section of tax filing form, that is the one for the income produced abroad. Your interests will then be taxed according to your tax rate. Taxation will therefore vary between 23% and 43% depending on your income..
The two most substantial advantages of these platforms are the fact that they manage to give an almost double interest compared to the Italian ones, and to guarantee the buyback in the event of insolvency.
Italian platforms VS European platforms
Here it is an example table that shows the net interest that can be reached depending on your income in the both Italian and European scenarios:
| Platform nationality | IRPEF bracket | Gross income | Taxation | Net income |
|---|---|---|---|---|
| Italian | Indipendente | 7% | 26% | 5,18% |
| European | Sotto i 15K | 13% | 23% | 10.01% |
| European | 15K - 28K | 13% | 27% | 9.49% |
| European | 28K - 55K | 13% | 30% | 8,06% |
| European | 55K-75K | 13% | 41% | 7,67% |
| European | Oltre 75K | 13% | 43% | 7,41% |
So, which investing choice worth it?
Considering on one hand the small tax advantage of investing in Italian platforms and on the other hand the lower guarantees and much lower interest rates (less than 10% and without buyback), the final decision appears rather simple. Even if you pay a little more on interest taxes, it is worth investing in European platforms rather that in Italian ones.