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The special tax regime for impatriate workers was incorporated in the Italian tax rules in 2015 to encourage highly qualified and specialised workers to move to Italy and foster at the same time the country’s technological, scientific and cultural development (Art. 16, Law Decree N. 147 of 14th September 2015).
Further on, Law Decree N. 34 of 30th April 2019 changed the features of the above special regime, increasing the envisaged tax benefits and enlarging the field of application. To access the special tax regime, impatriate workers were not required anymore to be high level managers or to be highly qualified.
The new special tax regime for impatriate workers
However, Law Decree N. 209 of 27th December 2023, published in the Official Journal N. 301 of the following 28th December, substantially redefines the special tax regime for impatriate workers.
The “new preferential tax regime for impatriate workers” can be applied to workers moving their fiscal residence to Italy from year 2024 (Art 5 of the above Law Decree N. 209/2023).
On the other hand, the previous rules (Art. 16, Law Decree N. 147 of 14th September 2015) can be applied to workers who have moved their registered residence in the country by 31st December 2023.
Differences between the old and the new impatriate tax regime
See below an overall scheme of requirements for the benefits’ application:
| Old impatriates’ regime As per Art. 16, Law Decree 147/2015 In force from 21/05/2022 to 29/12/2023 | New impatriates’ regime As per Art. 5, Law Decree 209/2023 In force as of 29/12/2023 | |
| Years of residence abroad | 2 tax periods | – 3 tax periods – 6 or 7 tax period if the work is performed in favour of the same foreign employer or of a company belonging to the same corporation |
| Years of residence in Italy (minimum required) | 2 years | 4 years |
| Income eligible for tax relief | – Employment income and assimilated work – Self employment income – Business income for sole proprietors | – Employment income and assimilated work – Self employment income from practising arts and professional activities |
| Maximum income eligible | None | Max yearly income: €600.000 |
| Tax benefit | – Taxable Income: 30% – Taxable Income: 10% for impatriates moving to Southern Italy Areas – Taxable Income for Athletes: 50% | – Taxable Income: 50% – Taxable Income: 40% when having a dependent child under 18 |
| Benefits’ Duration (years) | – 5 tax years – 5 + 5 tax years if: at least one dependent child under 18 or having purchased a real estate property from one year before moving to Italy or after moving to Italy, by the end of the 5 year benefits’ period. | – 5 tax years – 5 + 3 tax years if registered as a local resident in 2024 and having purchased a real estate property as a main residence by 31/12/2023 |
| Working activity performed in Italy | – Not necessarily for a different employer from before (only exception being the secondment) – Working activity must be performed in Italy for the major part of the tax year (i.e. more than 183 days/year) | – Working activity can be performed in favour of the same foreign employer or in favour of a company belonging to the same corporation – Working activity must be performed in Italy for the major part of the tax year (i.e. more than 183 days/year). |
| Professional qualification or specialization required | None | High professional qualification or specialization required |
New requirements for impatriate workers
According to the new rules, income produced on the Italian territory by workers who moved in the country as envisaged by Art. 2 TUIR, and not exceeding €600.000/year, contributes to the calculation of total income (i.e. IRPEF taxable income) only by 50% of their amount, provided that the following requirements are met.
Tax residence in Italy for at least four years
The impatriate workers must be committed to keep their tax residence in Italy for at least four years.
In case impatriates moves their tax residency to another country before four years have elapsed, they will lose all the tax benefits and the Tax Agency will proceed to claim back the tax benefits unduly enjoyed, applying the relevant interests on arrears.
Tax residence abroad in the previous three tax years
The impatriate worker must not have been fiscally resident in Italy in the three tax years prior to their relocation.
In case impatriates perform their working activity in Italy in favour of the same employer as before the relocation, or in favour of a company belonging to the same corporation, the minimum required time spent abroad is as follows:
- Six tax years , in case the impatriate had not been employed in Italy by the same employer or by a company belonging to the same corporation before moving abroad;
- Seven tax years, in case the impatriate had been employed in Italy by the same employer or by a company belonging to the same corporation before moving abroad.
The new special tax regime (as the previous regime also did) clearly allows the scheme to be applied in favour of Italian citizens not enlisted in the Registry of Italian citizens resident abroad (AIRE), provided they can prove their previous residence in a foreign country, as provided for by a relevant International Double Taxation Convention.
Work activity and types of income
- Work activities must be performed on the Italian territory for most of the relevant tax period.
- The impatriate worker is highly qualified or specialised as defined by Law Decree N. 108 of 28th June 2012 and Law Decree N.206 of 9th November 2007.
- The tax benefits are applicable to the following incomes (also included in the previous regime):
- Employment income
- Income from work assimilated to employment income
- Self-employment icome from practicing arts and professional activities
60% tax benefit for impatriate workers
An increased tax benefit of 60% is provided for when:
- The impatriate relocates in Italy with a dependent child under 18;
- A new child is born to or adopted by the impatriate during the years of the favourable tax regime; the additional benefit is granted starting from the tax year when the birth/adoption occurred and applies to the remaining years of availability of the tax regime.
Furthermore, the additional benefit can be applied only provided that the child under 18 or the adopted child does live and has residence in Italy.
Duration and extension of the impatriate tax regime Italy
The tax benefit envisaged by the new impatriates’ regime applies to the income of the tax year in which the tax residence has been relocated to Italy and to the following four tax years. Therefore, the ordinary duration of the tax benefit is of five tax years all together (no changes vis-a-vis the previous law).
Finally, the new rules do not envisage the opportunity to extend further the ordinary duration of the tax benefit.
The only exception to this rule is the one applicable for another three years to impatriates who meet the following conditions:
- The workers moved their registered residence to Italy in the year 2024 and
- Have purchased a residential real estate by 31.12.2023 and, in any event, in the 12 months preceding the relocation to Italy. The real estate must be their main residence in the country.
The tax benefit specified above applies in compliance with the conditions and limits set out in the EU regulations on the de minimis aid.
