People who want to live in Italy can now save more on taxes
The tax regime envisaged for “Impatriated” workers (i.e., those workers, Italian or foreign, who, after a period abroad of at least two years, transfer their residence to Italy and mainly carry out their working activity in Italy) has recently been modified, following the changes made by Art.5 of the DL n. 209/2023, introducing substantial restrictions regarding the previous regulation.
The new regulation of 2024
The changes introduced by the Decree, as anticipated, impose on those, Italian or foreign, who intend to move to Italy to carry out their working activity (as an employee, self-employed or entrepreneur), new and further requirements in order to have access.
The new provisions are applied on behalf of subjects who transfer their fiscal residence in Italy beginning with the 2024 tax period.
The differences from the previous regulatory framework:
- The tax base is reduced by 50% (instead of 70% and even 90% for specific cases).
- The duration of the benefit is confirmed as 5 years, and the possibility of extending this benefit is excluded (except in exceptional cases).
- The requirement of high qualification and specialization in order to access the benefit has been restored.
- The period of necessary residence abroad before the return (or first entry) in Italy has been increased from 2 to 3 years, with extension up to 6 or 7 years in cases in which the work carried out is on behalf of another person, or another person belonging to the same group.
- The minimum period during which the beneficiary must reside in Italy to not lose the benefit has been raised from 2 to 4 years.
- The nature of the subsidized incomes, including that of dependent and that of autonomous professional work, has been changed, to exclude the business earnings of the individual business owner.
- A maximum annual limit on eligible earnings has been imposed, fixed at 600,000 euros.
Who are the beneficiaries?
All citizens residing abroad (in Europe and outside Europe) who:
- Have not been resident in Italy for the last 3 years with extension up to 6 or 7 years in cases in which the work carried out is on behalf of the same foreign subject or of another subject belonging to the same group;
- Transfer their residence to Italy and undertake a dependent or autonomous work activity in Italy;
- Promise to remain in Italy for at least 4 successive years;
- Are in possession of the requirements of a high specialization or qualification.
What does the benefit entail?
The IRPEF taxable income, linked to dependent or autonomous work, has been reduced to 50% (to 40% in the presence of a minor child).
When does the benefit end?
If the condition of staying in Italy for 4 years is not met, the benefits already acquired are recovered together with the penalties, which range from 90% to 180% of the tax due and not paid, for each year of facilitation enjoyed.
Transitional Regime
The new provisions are applied on behalf of subjects who transfer their fiscal residence to Italy beginning with the 2024 tax period.
In any case, on behalf of certain subjects a specific transitional regime is called for, allowing for them to have the most favourable regulatory provision of the Impatriated Worker Regime, and in particular:
- those who transferred their registered residence to Italy before 31 December 2023,
- on behalf of sports workers whose contracts were stipulated before 31 December 2023.
What can we do for you?
Thanks to our experience and professionalism, we can provide you with support and assistance in your decisions. We can help you to carefully assess the timing of your transfer to Italy in order to benefit from the tax reduction mentioned above and to avoid the tax burden linked to double taxation risks in your country of residence. Our firm boasts many years of recognized experience in tax consultancy for foreigners in Italy.
Written by: Bechini, Benigni & Quilici – Dottori Commercialisti Associati