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Inpatriates tax relief applied to individuals who work from home in Italy for a foreign company

The Italian Revenue Agency clarifies that the employee who carries out his activity from home in Italy for a foreign company can benefit from the special tax relief provided for inpatriates workers.

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With the publication of the reply to Question No. 596, the Italian Revenue Agency clarified that the employee who work from home in Italy for a foreign company can benefit from the special tax relief provided for inpatriates workers.

Thanks to the reply published by the Italian Revenue Agency, clarifications were provided about a situation that has frequently occurred in recent years: the repatriation in Italy of individuals who have been working abroad and keep working with the same foreign company where the work was carried out in presence, but now from home.

To this category of workers, it is possible to apply the benefit for inpatriates workers pursuant to Article 16 of Legislative Decree 147/2015 for the tax period in which the individuals transfer their tax residence in Italy and for the four subsequent tax periods, with the possibility, if certain conditions are met, to extend the tax benefits for further five tax year.

As described in Circular No. 33/2020, the Italian Revenue Agency had already specified that individuals are eligible for the inpatriates tax relief:

“if they work from home in Italy under an employer established abroad, or whose clients (in the case of self-employment or business activity) are foreigners (non-residents)”.

In addition, the Revenue Agency provided clarifications also on the eligibility for the impatriate regime of those individuals who work in Italy for foreign companies, while also doing occasional work in a foreign country.

PLEASE NOTE It will be the worker’s duty:

  • To submit to the foreign employer a certificate issued by the Italian Revenue Agency certifying the tax residence in Italy;
  • To submit to the foreign employer a self-declaration to claim the tax relief for impatriate workers;
  • To submit the tax return in Italy applying directly in the declaration the special tax regime for impatriates workers because the foreign employer cannot assume the role of Italian substitute tax (unless it has a permanent establishment in Italy) and therefore cannot make any deduction on salaries paid to the employee resident in Italy.

Regulatory Framework

Reply n. 596/2021

Reference (Italian only)

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