Impatriates: current provisions

The purpose is nevertheless the same: to enhance Italy's attractiveness in the eyes of foreigners living abroad.

However, contrary to the legal provision in force until the 31st December 2023, the current version provides for a greater selection of beneficiaries, which is limited to individuals:

• with distinctive professional qualifications or titles;
• proven to be resident abroad for at least three tax periods (demonstrable by AIRE registration or by application of the provisions of the relevant double taxation convention).

Below are the key points of the scheme under discussion.

Requirements

The starting condition is always the transfer of residence to Italy.

More specifically, paragraph 1 of the aforementioned article specifies that the facilitated regime is applied to ‘...employment income, income assimilated to employment income, and self-employment income deriving from the exercise of arts and professions produced in Italy by workers who transfer their residence to the territory of the State pursuant to Article 2 of the Consolidated Income Tax Code, pursuant to Presidential Decree No. 917 of 22 December 1986.

Therefore, among the aforementioned kinds of income, the measure provides for its application to people who transfer their residence to Italy pursuant to Article 2 of the TUIR. 

The same Decree no. 209/2023 also deeply amended Article 2 of the TUIR, representing who are the taxes liable people in Italy, extending its scope. 

In detail, taxpayers are those who: 

• are resident in Italy within the meaning of the Civil Code; 
• are domiciled in Italy, meaning the place where the person's personal and family relationships primarily develop; 
• are in Italy; 
• are registered in the Register of Resident Population (unless proven otherwise).

These are alternative conditions, so the presence of even one of the above-mentioned conditions could be sufficient to consider the person resident in Italy. 

The other statutory requirements in order to gain access to this scheme are:   

a) Commitment to reside for tax purposes in Italy for no less than 4 tax periods;

b) not have been tax resident in Italy during the three tax periods preceding the transfer;

(c) that the work is performed for the greater part of the taxable period in Italy;

(d) compliance with the requirements of high qualification or specialisation as defined by Legislative Decree No. 108 of 28 June 2012 and Legislative Decree No. 9 November 2007. 206. In this respect, the high qualification and specialisation hypothesis applies in the case of:

• achievement of a higher education qualification attesting the completion of a higher education course of at least three years' duration and the relevant higher vocational qualification;
• compliance with the requirements set out in Legislative Decree no. 206 of 6.11.2007, limited to the exercise of the professions regulated therein.

The minimum period of residence abroad increases in cases of taxpayers who continue their employment under the same employer or one belonging to the same group. Namely:

• 6 years: if the taxpayer has not worked in Italy for the same employer or for a person belonging to the same group;
• 7 years: if the person concerned, prior to his/her transfer abroad, worked for the same employer or for another employer belonging to the same group.

With respect to the definition of individuals belonging to the same group, they are identified as those who have a direct or indirect control relationship within the meaning of Article 2359 (para. 1, no. 1) of the Civil Code or who are subject to common direct or indirect control by another individual.

If all requirements are met, it is therefore possible to access this tax regime, which consists of a 50% reduction of taxable income, for five tax periods (year of transfer and the following four). 

If tax residence in Italy is not maintained for at least four years, the worker forfeits the benefits and those already enjoyed are recovered, with interest.

The percentage of reduction is increased to 60 per cent in the following cases:

(a) the worker moves to Italy with a minor child;

(b) in the event of the birth of a child or the adoption of a child under the age of majority during the period of use of the scheme referred to in this Article. In such a case, the benefit referred to in this paragraph shall be granted as from the taxable period current at the time of the birth or adoption and for the residual period of eligibility for the benefit.

However, this increased benefit applies on condition that, during the period of the worker's use of the scheme, the minor child, or adopted child, is resident in the territory of the State.

For the purposes of verifying the existence of foreign residence (at least three tax periods), the provision specifies in paragraph 6 that Italian citizens are considered to be resident abroad if:

• they have been enrolled in the Anagrafe degli Italiani residenti all'estero (AIRE) (Register of Italians resident abroad) or
• have been resident in another State pursuant to a convention against double taxation on income.

Impatriates may be interested in the following highlights

According to the Budget Law (Art. 1, par. 187), the unemployment benefit for impatriated workers (introduced under Law 402/1975) is no longer applicable. This provision is referred to in INPS Circular No. 184 of 17 January 2025.

Therefore, repatriated Italian nationals will only benefit from the protections provided by Regulation 883/2004. Such regulation allows the exportability of unemployment benefits from the state where the employment relationship ended for a limited period, generally three months, that can be extended up to six months in some cases.

The 2025 Budget Law also introduced, in paragraph 6, a new bonus in favour of holders of employment income (Article 49, Tuir, excluding pension income letter (a), paragraph 2, Article 49, Tuir), the amount of which varies based on total income. Generalizing, albeit we should not, we are talking about the so-called tax wedge.

In this case, paragraph 9 below clarified that the income to be taken as a reference, for the purposes of determining overall income, for impatriates must also take into account the exempt portion of the subsidised income. Namely, this is with reference to impatriated workers pursuant to Article 16, Legislative Decree 147/2015, and Article 5, Legislative Decree 209/2003.