We recently published an article about the new rules, lower requirements and greater benefits for foreign and “impatriated” workers that decide to transfer their tax residency to Italy. The new discipline of this advantageous tax regime (regulated by Art.5 of the DL n.34/2019) reduced the IRPEF taxable income, linked to employed, self-employed or business, to 30% (to 10% if you move to a region of Southern Italy: Abruzzo, Molise, Campania, Puglia, Basilicata, Calabria Sardinia, Sicily). This way, foreign or Italian workers, who after a period abroad of at least two years, transfer their residence to Italy and mainly carry out their working activity there (for at least 183 days or 184 days during leap years), can now save more on taxes.
Update on the tax benefit period
If a foreign or Italian citizen residing abroad comes to Italy now to work, he or she cannot benefit from the tax reduction until 01.01.2021. Why?
This tax benefit is applied from the tax period in which the transfer of tax residence takes effect pursuant to Article 2 of the TUIR. Given that the tax period for individuals is equal to the calendar year, workers who intend to move or who have already moved to Italy in order to benefit from the 70% tax reduction (90% if they move to one of the regions of Southern Italy) must do so by July 1, 2020. Those who transfer their residence to Italy after July 1, 2020 will have to pay in full the taxes on income produced during the remaining months of 2020. These would then be subject to 100% ordinary taxation in Italy, and could also be taxable in the foreign country of residence.
For this reason, it is important to carefully evaluate the timing of the transfer to Italy in order to qualify for this tax benefit.
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 MGI Vannucci & Associati boasts many years of recognized experience in tax consultancy for foreigners in Italy.