Five per thousand—how does it work and how is it calculated?

If you watch Italian TV you’re probably familiar with the term “5 per mille”, or “five per thousand”, from charity commercials. But how many of us really know what that phrase means? And five per thousand of what, you ask? Let's take a look at how this law works and how its percentage—which is allocated to support the non-profit sector and scientific research—is calculated.

Established as an experiment in 2006, the five per thousand law allows taxpayers to contribute a percentage of their income tax—five per thousand or 0.5%—to an organization engaged in social causes. It's a voluntary contribution that, as part of your income tax return, allows taxpayers to invest in the non-profit association or social sector of your choice.

A taxpayer’s five per thousand can be contributed to any one of the associations or organizations approved by the Italian Revenue Agency in the following sectors:

• Volunteering
• Scientific and university research
• Health research
• Social policies pursued by municipalities
• Amateur sports activities
• Protection, promotion, and enhancement of cultural and landscape heritage
• Support for the management of protected areas

Is the five per thousand a donation? While ‘donate your five per thousand’ is commonly mentioned in Italy, the five per thousand is actually not a donation. Instead, the 0.5% is taken from your annual personal income tax, which would normally go to the government, and contributed to one of the approved organizations of your choice. It’s not a donation because no additional expense is incurred. And those who take advantage of the five per thousand option don’t receive additional tax relief on the contribution, which generally applies to other types of donations.

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As we mentioned above, the five per thousand is calculated based on personal income tax and the value contributed is up to 0.5% of personal income. If you would like to calculate the potential value of your five per thousand, you simply need to divide your income tax amount by 1000 and then multiply it by 5.

On your tax return or CU form (Certificazione Unica), specify where you’d like to contribute your five per thousand. In all tax modules (730, Unico, and CU forms), you’ll find a section dedicated to the five per thousand under 'Scelta per la destinazione del cinque per mille dell'IRPEF' (Allocation choice—five per thousand of your personal income).

This section is divided into different categories representing the various organizations and associations where you can contribute your tax share.

On your income tax return, there are two different ways to specify who will receive your five per thousand—you may choose one of the following options:

• Directly insert the tax code of your chosen organization in the relevant category box.
• Add your signature to the relevant category box and your tax share will be divided among the organizations included in that category.

What if I insert the tax code in the wrong box—who will receive my five per thousand tax share? The tax code takes priority. If a tax code is included, the corresponding organization will receive your five per thousand contribution.

Is the five per thousand mandatory? No, using the five per thousand scheme isn't mandatory—every citizen may choose whether to contribute to it or not.

Who receives the five per thousand if no organization or sector is chosen? In this case, the five per thousand will not be contributed and the full income tax will go to the government.

Who is eligible to receive the five per thousand? The list of accepted beneficiaries is large and includes many diverse categories, including the AIRC foundation for cancer research, Emergency, Doctors Without Borders (Médecins Sans Frontières), Save the Children, Telethon Foundation, E.N.P.A. (National Committee for the Protection of Animals), Greenpeace, Survival International, and many associations for scientific research. Visit the Italian Revenue Agency’s 2021 list of beneficiaries for a complete list of organizations eligible for the five per thousand contribution.

The two per thousand, the five per thousand, and the eight per thousand are all ways to contribute part of your income tax return. As explained above, the five per thousand allows you to share 0.5% of your personal income tax with the non-profit sector.

The eight per thousand, on the other hand, is a percentage of tax income that you can contribute to the Italian state, the Catholic Church, or one of twelve other religious denominations recognized by the government.

Finally, the two per thousand is a percentage of income tax that you can contribute to a political party.

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