New rules for the 2024 Impatriates Regime for Individuals
Legislative Decree no. 209 of 27 December 2023 was published in the Official Gazette (OG General Series No. 301 of 28-12-2023) and is stated to enter into force from 1 January 2024.
The Decree, an executive measure, was approved by the Italian Council of Ministers pursuant to authority granted by Parliament by Law No. 111 of 9 August 2023. The Law conferred authority on the Italian Government to revise the Italian tax system, within the general principles of European Union and international tax law.
Amongst other things, the Decree, at article 5, implements a “new” beneficial tax regime for Impatriates purportedly replacing the former regime but only for post 2023 arrivers.
According to the Decree, the new regime will apply to individuals who are tax resident in Italy, for the first time in the past three to seven years, starting from the Italian tax year ending 31 December 2024 (FY 2024), and who apply to register as resident in Italy on or after 1 January 2024. Individuals already benefitting from the former regime at 31 December 2023, or who are registered as resident in Italy with effect on or before 31 December 2023, will remain on the current regime, for the rest of its natural 5 or 10 year term, and will not be impacted by the new rules.
The abolition of the earlier legislation (Article 16 of Legislative Decree 14 September 2015, no. 147, and Article 5, paragraphs 2-bis, 2-ter and 2-quater, of Decree-Law 30 April 2019, no. 34, converted, with amendments, by Law No. 28 June 2019, no. 58)
This means that the (copious) Tax Agency guidance and jurisprudence relating to the old regime will not necessary apply under the new regime.
Table of Contents
Rate of the Relief, Timescale and Earnings Cap
- The relief post 2024 will apply generally at the rate of 50%. Thus 50% of remuneration will be exempt from taxation, the other 50% will be liable to tax at scale rates applicable to the taxpayer’s relevant total income. This rate substitutes the existing dual rates of 70% and 90% under the pre-exisiting regime;
- The Relief will apply for a maximum of five tax periods (generally the calendar year) starting with the first year in which the taxpayer is tax resident in Italy;
- The benefit will be capped at an annual salary of Euro 600,000 – no relief will be available for earnings over that amount;
- The exempt portion of income will rise to 60% for a worker with at least one minor (under age eighteen) child at the time of the transfer to Italy . If the worker has no children at the time of the transfer, in the case of the subsequent birth or adoption of a child, the extra benefit will apply from the tax year in which the child is born or adopted up to the end of the original 5 year period. The child must be tax resident in Italy for the whole of the period in which the tax benefit applies.
Period outside Italy before the transfer
- The worker must have been tax resident outside Italy in the three tax periods preceding the transfer;
- For employees transferring to Italy to work for a company within the same group of companies as their former employer outside Italy, the period abroad prior to the transfer to Italy must be no less than six tax years;
- For employees who have gone abroad and worked for a company belonging to the same group as their original employer in Italy, and who return to work for an Italian company belonging to the same group, the prior period working abroad must be at least seven years.
- Italian citizens must have been registered with the AIRE (the register of Italian resident population) or have been tax resident pursuant to an applicable double tax treaty in another country for the whole of the applicable period (three, four or six years) before transferring to Italy.
Companies are deemed to belong to to the same group where there is a relationship of direct or indirect control within the meaning of Article 2359, para (1), section (1), of the Civil Code between the two companies or where both companies are subject to common direct or indirect control by a third person.
Requirement to Work in Italy and Minimum Period
- The work activity (employment or self employment as a professional) must be carried out for the greater part of the tax period from Italian territory. The relief will not apply to profits from a business activity. The requirement in the original text that the employer be a resident company, appears to have been removed
- The worker must remain tax resident in Italy for four tax years. If the worker does not remain for the minimum term, they will lose the benefit of the Relief and will need to pay the extra tax due with interest (but not any penalty, it would appear);
Individual Requirements
- The worker must be in possession of the high qualification or specialisation requirements defined by specific Italian legislation (a minimum three year higher education qualification and higher educational qualification attested by the country of origin and recognized in Italy). This requirement applies alike to Italian citizens, EU blue card holders and non EU citizens legally holding the right to remain within Italian territory). Under the prior regime Italian citizens were not obliged to meet this requirement.
The educational qualification to be “recognized” by the Italian authorities does not necessarily need to be a bachelor’s degree but must be the result of a minimum three year course resulting in a professional qualification.
In any event the qualification must be “recognized” by an application for a “Dichiarazione di Valore” (Declaration of Value or DoV) – a certificate issued by the Italian consulate for the jurisdiction in which educational institute issuing the professional qualification is situated, classifying the qualification within the relevant category under the Italian system. Original certificates need to be “legalized” – generally this will mean presenting the document to the competent government authority of the state of the issuing institution for an apostille and then official translation into Italian prior to presentation of the request for the DoV to the Italian consulate.
How to claim the relief
If you are an employee you should make a written letter of request (self certifying that you meet all the requisites) to your employer, ideally before receipt of your first instalment of annual salary in the first tax year that the relief applies – although adjustment via a future payslip for the same year may be possible.
For those employees who have not presented the letter of request for reduction of tax via the payroll, a refund or tax credit can be generated via the annual tax return. this must be done in the return for the first tax year for which the Impatriates Regime applies.
For the self-employed the benefit can be claimed in the first annual tax return for the first year of tax residence after the transfer to Italy.
Grandfathering
The provisions of the old regime (70% or 90% relief) will continue to apply to those who have succesfully applied to be registered as resident in Italy (with the list of resident population “anagrafe“) on or before 31 December 2023 or, for sportsmen and women, to those who have stipulated the relevant employment contract by that date.
Extension of the initial five year period
The reduced tax regime can be extended for a further three tax years, after the initial five, for those who purchase a residential real estate unit to be used as a main residence on or before 31 December 2023 and, in any case, in the 12 months prior to the transfer of residence.
Our interpretation of the legislation is that in order to get the three year extension an individual:
- must have completed a purchase of real estate on or before 31 December 2023; and
- must be considered tax resident in Italy (under the new rules on tax residence) for FY 2024; and
- must register as resident in Italy no later than 12 months after the purchase of the property.
This interpretation needs to be confirmed by the official guidance.
In the further three year period, taxable income is reduced by 50%.
EU State Aid Limitation
According to the Decree the provisions of this article apply in compliance with the conditions and limitations of Regulation (EU) 1407/2013 of the Commission of December 18, 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid, Commission Regulation (EU) 1408/2013 of Commission of December 18, 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid in the agricultural sector, and Commission Regulation (EU) 717/2014 of the Commission of June 27, 2014 on the on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid in the fisheries and aquaculture.
This broad statement, which amplifies a similar intention in the previous regulations will be of significant importance to high earning self employed, who will be likely to a maximum tax saving of Euro 300,000 over any three period. It remains to be seen whether the Italian government will implement specific rules limiting the tax benefit for employees – at present there seems no intention in this sense.
Social Security and Wealth Tax
The exemption is expressed to apply only to income taxes. It does not necessarily apply to statutory social security contributions (pension, healthcare and unemployment benefit) which, for employees are, according to the authorities, calculated on 100% of salary.
In Circular number 52 of 7 June 2023, the Italian Social Security Institute (INPS) has confirmed that for certain self employed workers the social security basis is the same as that the reduced basis used to calculate the income tax – i.e. the reduced basis by virtue of the Impatriates Relief. The circular makes reference to the former Impatriates Regime, but it is believed that the reduction (50% or 60%) will continue to apply from FY 2024 onward.
The Impatriates Regime does not provide any exemption from Italy’s foreign asset reporting requirements (Section RW) or exemption/reduction of wealth tax generally applicable to people who are tax resident in Italy for any year.
Professors and Research Workers
The new rules do not impact the existing regime applicable to professors and research workers.
Checklist for Eligibility
The following documents are typically requested by the Tax Agency on audit of eligibility for the regime. It is worthwhile collating these as you start on the regime, and indeed the documentary support may be required by an employer, if you are requesting that income tax via the payroll is being reduced.
- Evidence of non residence in Italy for requisite prior tax periods (e.g. certificate of tax residence issued by foreign authorities, copies of tax returns, annual earnings certification etc.
- Degree certificate
- Declaration of Value for degree certificate – instructions here: Italian Ministerial website in Italian language – translated version in English
- Certificate of residence (registration with the (Anagrafe) or confirmation of acceptance of declaration of residence issued by local Comune
- Documentary evidence of registration with AIRE (for Italian citizens) or tax residence in white list country for requisite tax periods (3 to 7) before the move to Italy
- Confirmation of intention to stay tax resident in Italy for at least four tax periods
- Confirmation of intention to work for the greater part of each future tax period from Italian territory
- Confirmation that earnings will be below the Euro 600k annual limit and tax savings will not exceed EU state aid thresholds
The exact evidence required will depend on an individual’s particular circumstances. It may be possible to proceed with application of the Impatriates Relief while the supporting documents are being collected.
Next Steps
it will likely be necessary to review the usual guidelines issued by the Tax Agency containing exact details and definitions of some of the terminology used. It is hoped that these guidelines will be issued shortly.
Legislation and guidance
Please refer to our blog post on the pre 2024 regime for a listing of the base legislation and Tax Agency guidance on that regime.
- Legislative Decree no. 209 of 27 December 2023 – Official Gazette (OG General Series No. 301 of 28-12-2023)
- Translation into the English language of the Legislative Decree no. 209 of 27 December 2023
- Tax Agency webpage – old regime
- Tax Agency webpage – new regime
- Legislative Decree 28 June 2012, no. 108
Attuazione della direttiva 2009/50/CE sulle condizioni di ingresso e soggiorno di cittadini di Paesi terzi che intendano svolgere lavori altamente qualificati. (12G0124) - Legislative Decree 9 Novembre 2007, no. 206
Attuazione della direttiva 2005/36/CE relativa al riconoscimento delle qualifiche professionali, - ISTAT – Nomenclatura e classificazione delle Unità Professionali
Interpello (Replies to Requests for Official Ruling)
Resolution no. 72, 26 September 2018 – Work activity performed in Italy and abroad for companies belonging to a multinational group;
Risposta no. 272 -114/2018 Impatriates Regime not available where no “connection” between transfer of residence and new job in Italy. Taxpayer coming to Italy in search of new employment.
Resolution no. 51, 6 July 2018 – Tax residence abroad before impatriation – 2 complete tax years required;
Risposta no. 492/2019 – assignment to France – importance of lack of continuity – worker transferring to Italy with promotion to new level;
Risposta no. 495/2019 – taxpayer coming from Ireland – taxed in full on first year (as non resident), commencement of special regime starting from first year of tax residence and following four years;
Risposta no. 497/2019 – taxpayer working abroad, not registered with the AIRE;
Risposta no. 59/2020 – Timing of the benefit – interaction between time of starting work and first year of tax residence – importance of claiming relief either by request to the employer or in tax return for first period of residence or lose – possibility of claiming relief for remaining years;
Risposta no. 533/2020 – Two years residence abroad for study purposes (Master’s Degree) not sufficient;
Risposta no. 42/2021 – Employee assigned abroad, returning to Italy – importance of non continuity;
Risposta no. 407/2021 Establishment of a single-member newco, attribution to the sole shareholder-manager of remuneration based on profits – access to the ‘impatriates’ regime not available as the set up of the structure is intended purely to obtain a tax advantage and for no valid commercial reason – abuse of law.
Risposta no. 458/2021 – Tax treatment of income from employment paid to resident and non-resident individuals who due to the Covid emergency performed their work remotely in Italy, instead of the foreign country to which they had been posted and in which they usually worked (no discussion of availability of Impatriates’ Relief);
Risposta no. 596/2021 – Impatriates’ regime available for employees working remotely for non Italian companies.
Risposta no. 626/2021 – tax treatment of income from employment received by a nonresident individual who, due to the Covid emergency, performed their work remotely from Italy, instead of in the foreign country in which they were resident and normally working (no discussion of availability of Impatriates’ Relief);
Risposta no. 703/2021 – requirements, exclusions and timings for taxpayers interested in the 5 year extension
Risposta no. 854/2021 Application of Impatriates Regime to Stock Option plans
Risposta no. 159/2022 – Return of employee from assignment abroad, continuing on same terms of employment, regime not applicable – useful discussion of the “continuity” principal.
Risposta no. 172/2022 – UK citizen arriving pre-2020 admitted possibility of five year extension due to non discrimination provisions of EU/Italy withdrawal agreement.
Risposta n. 321/2022 Dual Italian/non EU citizen, a pre-2020 arriver, denied 5 year extension due to not having been registered in the AIRE prior to transfer to Italy.
Risposta no. 460/2022 – The self employed cannot switch from Regime Forfettario flat-rate scheme’to Impatriates Relief in the first five years after transferring residence to Italy.
Risposta no. 190/2023 – Application of the Regime Forfettario flat-rate scheme’ precludes subsequent access to Impatriates Regime and extension thereof.
Risposta n. 152/2024 Access to Impatriates Regime denied for a taxpayer transferring to Italy to undertake an MBA course at an Italian University , even though the course involved workplace periods of (unremunerated) training/stage.
Risposta no. 159/2024 Impatriates Regime (and extension) can be applied for later years, even where for the first years after transfer to Italy, the taxpayer elected the special regime for HNWI’s under Article 24-bis of the Italian Tax Code, provided conditions for the Impatriates Regime were satisfied at time of transfer to Italy.
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I am considering returning either as self-employed or there’s potential for employment by a company, due to my experience in a specific sector.
I would like to make sure I understand my options 100%
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Great post. Just have a few questions:
1) “For employees transferring to Italy to work for a company within the same group of companies as their former employer outside Italy, the period abroad prior to the transfer to Italy must be no less than six tax years”.
Throughout my life, I was a tax resident in a country other than Italy. For a few months while in that country, I provided consultancy services under a contractor agreement (not as an employee) for an Italian company. If I then moved to Italy and was hired as an employee by this Italian company, would I still be eligible for this benefit? To clarify, in this example, I became a tax resident in Italy for the first time when I started working for this Italian company (before that, I provided services as a contractor and had never lived in Italy).
2) There are two types of ‘Dichiarazione di Valore’ I can request at the consulate. One is the ‘Dichiarazione di Valore Dei Titoli di Studio Conseguiti in Loco,’ which validates my higher education degree. The other is for the ‘recognition of a profession in Italy.’ Which one should I get?
Thank you
The legislation as a default rule provides that in order to qualify for the Impatriates Regime you must, among other conditions, have been tax resident outside Italy for the three years before the first year of tax residence in Italy. The minimum period is extended to six years for those who carried out their work activity in Italy in favour of the same person for whom they were employed (or utilised) abroad before the transfer or in favour of a person belonging to the same group, in which case the the minimum foreign permanence requirement is six tax periods, if the worker was not formerly employed or utilised in Italy in favour of the same person or of a person belonging to the same group as him or seven All we have to go on at present is the fairly terse wording of the legislation. You can see a translation here. There I have translated the word “impiegato” as employed but it can also mean utilised and so I think it is wide enough to include a relationship of self employment. As you were not physically working on Italian soil (if I understand correctly) then you may be excluded from having to prove the extra three years. However, given that your income would likely be considered an Italian source of income, I have some doubts. I think though that the issue is academic, because if you have not been tax resident in Italy in the past seven years, you anyway satisfy this test. You will just have to be prepared to provide the extra paperwork to prove it.
As regards the Dichiarazione di Valore, the one for the professional recognition is exactly that – certification of a professional qualification such as those required by attorneys, doctors, engineers, accountants etc. If you are so qualified and you want to have the professional qualification recognized by a professional body in Italy, so that you can be admitted to the relevant Italian professional body, then you should also ask for the professional dichiarazione DoV. It will also be useful for proving that you are eligible for the Impatriates Regime. And if you are seeking access to a professional body you will also most likely need to supply the Dichiarazione di Valore Dei Titoli di Studio Conseguiti in Loco which will cover your degree certificate(s).
It is impossible to give you specific professional advice without more information, but we hope the above helps.
Thank you for this post.
My case is very similar to the one you described. I have a degree in modern languages and philosophy from a UK university followed by 20 years experience as a software developer. May I ask if there have been further clarifications on the question of how the degree relates to the profession?
If not, do I understand correctly that I should:
1) Get the DoV
2) Submit this along with my CV or proof of experience to the tax office for a ruling?
Thank you!
Agreed. A Tax Agency ruling on this point would be welcome to clear up the doubt as to whether the degree needs specifically to relate to the work being undertaken following the transfer to Italy, or whether it is sufficient simply to have a bachelor’s degree.
Thanks for the great post. We are looking to hire someone (non-Italian) who has been a resident working outside of Italy since 2019, however between 2017 and 2019 there were registered as a student in Italy and received their higher education degree (Erasmus Mundus Masters) from Italy. Does this impact at all their eligibility? Also, having received a Masters from an Italian institution, I assume they will not have to obtain the Dichiarazione di Valore?
We should think that they qualify. Our interpretation of the rules is that an individual (assuming they are not moving within a group of companies etc.) needs to have been tax resident abroad for the three years prior to their first calendar year of tax residence (as defined in the Italian tax code) in Italy – which will be the first year of the five year Impatriates regime. Under Italian tax law you are tax resident or not for any tax year, depending on whether you meet any of the tests of tax residence for the greater part of the year. That means that, for someone moving in the second half of 2024, FY 2025 will likely be the first year of tax residence in Italy. To be eligible the individual needs to have been tax resident outside Italy for FY’s 2022, 2023, and 2024. Their residence status prior to 2022 is not relevant, under the current version of the Relief. Note that any Italian source earnings received at the tail end of FY 2024 will be liable to Italian tax at normal rates and the Impatriates Relief will kick in for earnings received on or after 1 January 2025. We generally advise to time the move and the start of the Italian employment as near as possible to the start of a new year, as this reduces double taxation issues (except possibly for people moving from countries with a non calendar tax year end).
And the DoV is not needed for a degree certificate issued by an Italian University.
I am a Greek citizen already working in my home country and i am expecting to receive an offer for a working position in Italy. My family status is married with 2 children ( both above 21 years old ). In order to be identified from the Italian tax system as employee with Italian residence need to be and work at least 183 days per year in Italy, but what about my wife is she also obligated to stay in Italy for the same period per year for the first 4 years?
Hi we cannot reply to a specific query on a public forum but as a general rule there is no obligation for both spouses to be considered tax resident in Italy for one spouse to be eligible for the Impatriates Relief. Each taxpayer is looked at separately and the “working” spouse needs to meet the specific conditions for the Impatriates Relief – none of the conditions refer to the spouse. The working spouse needs to be Italian tax resident for any Italian tax year in which they want the Impatriates Relief to apply (and stay so resident for at least four tax years.) See this blog post for the definition of Italian tax residence.
You will note that while having an Italian tax resident spouse can make one Italian tax resident, even if none of the other tests of residence apply, there is no rule under the Italian Tax Code that states that you are not Italian tax resident simply by virtue of having a non Italian tax resident spouse. A double tax treaty could technically override the Italian tax residence position, if the working spouse is considered tax resident in another country apart from Italy. But the definition of tax residence for purposes of the Impatriates Relief refers to Italian domestic law, so being deemed to be non resident in Italy by virtue of also being tax resident elsewhere would be difficult, as long as you meet the Italian test of tax residence in any Italian tax year.
Since having close family who are tax resident in Italy can make an individual tax resident in Italy under the Italian test of tax residence your wife could, depending on her personal circumstances, be considered tax resident in Italy simply by virtue of the fact that her spouse is tax resident in Italy for any tax year. Your wife will need carefully to review her status, if she is not intending to transfer her residence to Italy.
Hello! Thank you for the detailed post. What isn’t clear to me is if this tax regime applies for those *arriving* to Italy after 2024. If I move my residence there in February 2025, am I eligible? And if so, am I eligible for the partial year of 2025, or only for my first full year living in Italy? Thank you!
The fundamental point is that the Italian tax year (the calendar year for individuals) is, on the whole, taken on a stand-alone basis. You are generally – double tax treaties can intervene here – either tax resident or not for a whole tax year, depending on whether you meet any of the 183 days tests in the Italian statutory tax residence test. The Impatriates Relief starts from the first tax year for which you are a tax resident of Italy. The Relief starts from that first year and applies for the following four tax years (providing you meet and continue to meet the conditions).
So if you transfer your residence to Italy in February of a year, and meet any of 183 day tests of tax residence for that year, then that year will be your first year of Italian tax residence. It will also be the first year of the Impatriates Relief. but the Impatriates Relief only applies to earnings for work performed in Italy – e.g. earnings from March to December of that year. In other words you are using up one year of Impatriates Relief for 10 months income.
Also note that due to the all-in all out concept of tax residence you are liable to Italian tax on worldwide income for the whole year (i.e.. from 1 January). If you have been in receipt of income for work done abroad in January and February of the first year of Italian tax residence, you will need, subject to anything in a double tax treaty, to report the January and February income in your annual Italian tax return for that year. That foreign source income does not benefit from the Impatriates Relief reduction. You should be able to offset any tax definitively paid abroad against the Italian tax due on the foreign source income, as long as you meet the general conditions for tax credit offset and as long as you claim the credit in the annual tax return and file the return by the due deadlines.
By the same token, if you transfer to Italy in the second half of the year, such that you do not meet any of the 183 day tests of tax residence, then you will not generally be liable to Italian tax for income received in the year, except for any Italian source income, such as earnings received from an Italian employer or profts from an freelance activity, in the latter half of the year. The Impatriates Regime does not apply to the Italian source income or profits received in a year in which you are not tax resident in Italy and thus you will start on the Impatriates Regime the following year, which will be the first year of the (maximum) five years to which the Regime applies.
Due to the complexities as described above, we advise clients (at least those who ask us in time) to time their transfer to Italy as near as possible to an Italian tax (calendar) year end.