The Italian Revenue Agency, in its answer to ruling No. 371 and No. 372 of 12 July 2022, underlined that the extension of the special regime for impatriate workers for a further five years is subject to the exercise of the option upon payment of the amounts due within the deadline indicated.
The cases submitted to the Revenue Agency
The cases submitted to the attention of the Italian Tax Administration concerned two workers who, in 2016, had joined the old special regime for impatriated workers (Article 16 of Legislative Decree No. 147 of 14/09/2015).
The applicants pointed out to the Agency that they met the requirements to exercise the option to extend the regime under paragraph 2-bis of Article 5 of Legislative Decree No. 34 of 2019, pursuant to which those who have been enrolled in the Register of Italians residing abroad or who are citizens of EU Member States, who have already transferred their residence before the year 2020 and who on 31 December 2019 are beneficiaries of the impatriate regime may opt for the extension of the special regime for impatriate workers for a further five tax periods upon payment of an amount equal to 10 or 5 per cent of the taxable employment and self-employment income produced in Italy relating to the tax period preceding the one in which the option is exercised.
On this point, the protocol of the Revenue Agency of 3 March 2021, No. 60353, provides, in particular, at Paragraph 1 (“Procedures for exercising the option for the purpose of extending the recognition of tax benefits related to the return to Italy“) that the option must be exercised by paying the amounts due in a single instalment by 30 June of the year following the one in which the first five-year period of eligibility for the tax relief is completed.
In both cases no. 371 and 372, the applicants had not exercised the option for the extension and paid the amounts due by 30 June of the year following the year in which the five-year period came to an end, and they therefore asked the Agency to allow them to exercise the option for the extension of the benefit by making the late payment of the substitute tax.
According to the Applicants’ thesis, it is in fact possible to exercise the option for the extension of the regime even if the deadline indicated in protocol No. 60353 has expired, since it is not a peremptory deadline, by availing oneself of the institute of the “ravvedimento operoso” under Article 13 of Legislative Decree No. 471/97.
The position taken by the Administration
The Revenue Agency did not agree with the Applicants’ argument since, pursuant to the aforementioned paragraph 2-bis of Article 5 of the Growth Decree, the extension for a further five years of the special regime governed by Article 16 of the Internationalisation Decree is subject to the exercise of the option upon payment of the amounts due within the term indicated under point 1. 4 of the Provision of the Director of the Revenue Agency of 3 March 2021, prot. no. 60353.
In the opinion of the Revenue Agency, the failure to do so precludes the application of the benefit in question, since recourse to the institute of the “ravvedimento operoso” is not allowed.
The thesis of the Italia Tax Administration does not appear to be entirely acceptable, as it is based on a restrictive interpretation of paragraph 2-bis of Article 5, which requires taxpayers to exercise the option for the extension after paying the tax, but which does not impose any forfeiture of the benefit in the event of late payment.