Under the beneficial tax regime for “impatriates” employment income and related income (e.g. pensions), self-employment income, and business income, if produced in Italy by workers who transfer their residence in Italy pursuant to Article 2, Italian Tax Code, is taxable only for 30 per cent of its amount (10 per cent in the case of transfer to a city of a Southern region, i.e. Abruzzo, Molise, Campania, Puglia, Basilicata, Calabria, Sardinia, Sicilia), subject to the following conditions:
Italian Tax Authorities recently1 specified that, in the case of transfer to one of the Southern regions previously indicated, the worker will be entitled to the more beneficial regime even if they work in a region other than that of residence, providing they:
Foreign source income or other Italian source income (e.g. financial or property income) is subject to ordinary taxation.
This regime is applicable for a period of 5 years. However, it can be extended for a further 5 years in the event that:
In the case of an extension to the regime, the taxable share of income is increased to 50 per cent in the extension years (but is lowered to 10 per cent if the worker has at least three minor or dependent children).
Workers who moved to Italy before 30 April 2019 have been subject to the former discipline of the “impatriates” regime, which did not provide the extension of the tax relief. The 2021 Italian Budget Law2 extended this option to said workers (provided they become the owner of real estate and have at least one minor or dependent child) after payment of an amount equal to 10% (5% in case of three or more minor or dependent children) of the entire eligible employment and self-employment income produced in Italy, relating to the tax period prior to the one in which the option is exercised.
For professional sportsmen, the taxable share of income is 50%. The election is subject to the payment of a contribution equal to 0.5% of the tax base.
1 Circular Letter December 28th 2020 No. 33, Para. 4.
2 Circular Letter December 28th 2020 No. 33, Para, 3.2.
3 Art. 1, Para. 50, Law December 30th 2020 No. 178
With this newsletter we give an overview of recent or expected changes in the area of Global Mobility in different countries.
If you have any questions about WTS Global or our global services, please get in touch.
We will respond to you as soon as possible.