Riforma Fiscalità 970x720 - Residenza delle persone fisiche e il regime fiscaleThe Legislative Decree No. 209/2023 has reformed the criteria for determining the tax residence of individuals in Italy and has introduced more restrictive conditions for applying the inbound expatriates tax regime.

Tax residence of individuals

Starting from January 1st, 2024:

  • Individuals are considered tax residents in Italy if they have their residence or domicile or are physically present in Italy for the majority of the fiscal year.
  • The domicile, for tax purposes, is the place where the taxpayer establishes his/her personal and family bonds.
  • Individuals registered in the registry of resident population for the majority of the fiscal year are presumed to be tax residents in Italy, unless proven otherwise.

Inbound expatriates tax regime

The new inbound expatriates tax regime applies to workers who moved to Italy starting from 2024 and provides for a 50% tax exemption on employment income sourced in Italy up to 600,000 euros annually, increased to 60% if the worker has a dependent minor child. To benefit from the new inbound expatriates tax regime, the following conditions must be met:

  • Having been tax resident abroad for a period ranging from 3 to 7 years, depending on the various cases provided for by the law.
  • Being highly qualified/specialized, according to certain parameters defined by the law.
  • Being tax resident in Italy for at least 4 years.
  • Working in Italy for more than 183 days per year.

The tax benefit can last for up to 5 years, with no possibility of renewal.

Therefore, it is essential for Italian companies that intends to assign their personnel abroad or repatriate them at the end of the assignment to pay attention to the aforementioned changes, in order to effectively manage the expatriation or repatriation of their employees.

Our services

The Global Mobility Department of Bacciardi Partners can assist you in assessing the impacts that the examined tax changes may have on managing personnel to be assigned abroad and/or repatriated to Italy, in order to prevent possible tax issues for the company and/or employees.