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With Answer No. 82/2026, the Italian Revenue Agency (Agenzia delle Entrate) has provided further guidance on the new tax incentive scheme for returning workers, regulated by Article 5 of Legislative Decree No. 209 of 27 December 2023, offering important operational clarifications.
The regime, applicable to individuals who transfer their tax residence to Italy from the 2024 tax year onwards, provides for a significant reduction of the taxable base of income from employment, equivalent income, and self-employment earned in the national territory, within certain limits and subject to specific conditions.
Eligible income contributes to the formation of the overall taxable income at a rate of 50%, further reduced to 40% in the presence of certain family-related requirements.
Case Examined by the Revenue Agency
The Revenue Agency’s response considers the case of an Italian citizen, resident abroad for over thirty years and registered with AIRE (Registry of Italians Resident Abroad), employed under a subordinate employment contract with a foreign company. The taxpayer declared the intention to transfer his tax residence to Italy in 2026, while maintaining the same employment relationship and performing work exclusively through smart working.
Another relevant element concerns the family situation: the worker is married and has three minor children, already fiscally resident in Italy from the year preceding his return, following the mother’s transfer.
Considering these circumstances, the taxpayer requested clarifications regarding eligibility for the new incentive scheme, as well as the correct determination of the taxable income percentage.
Continuity of Employment and Smart Working
One of the main issues addressed concerns the compatibility of the regime with the continuation of an employment relationship with a foreign employer. On this point, the Revenue Agency confirms an established position in the application of Article 5 of Legislative Decree No. 209/2023, namely that continuity of employment with a non-resident entity does not per se constitute an impediment to access the returning worker regime.
It is therefore possible to benefit from the tax incentive even if, after transferring tax residence to Italy, the worker continues to perform his duties through smart working for the same foreign employer. The essential condition remains that the work activity is performed predominantly within the national territory. Accordingly, the actual place of performance of the work is relevant, regardless of the employer’s registered office or the location of the entity paying the remuneration.
Reduction of the Taxable Base and Presence of Minor Children
Another particularly relevant aspect concerns the application of the more favorable taxation rate in the presence of minor children. The legislation provides that the taxable portion of income is reduced from 50% to 40% where the worker transfers to Italy with at least one minor child, or where a child is born or adopted during the period of application of the regime.
In the case at hand, the Agency clarifies that the enhanced benefit applies even if the children were already resident in Italy prior to the worker’s return, provided they remain fiscally resident in the national territory during the period of the incentive’s application. It is also reaffirmed that the eventual attainment of majority by the children during the incentive period does not result in the loss of the benefit, which continues to apply until its natural expiration.
Duration of the Regime and Conditions of Access
The tax incentive applies from the tax period in which the taxpayer transfers tax residence to Italy and for the following four tax periods. Enjoyment of the benefit is conditional upon maintaining tax residence in Italy for at least four years; otherwise, the taxpayer forfeits the incentive, with recovery of the benefits received plus interest.
Other conditions established by the legislation remain applicable, including:
- Absence of tax residence in Italy in the tax periods preceding the transfer, according to the specified timing;
- Possession of adequate qualifications or specialization;
- Performance of work activity predominantly in Italy.
Concluding Remarks
Answer No. 82/2026 confirms a favourable and consistent interpretation with previous positions of the Revenue Agency, helping to clarify operational aspects of relevance for workers intending to transfer their tax residence to Italy. In particular, the principle is reinforced that the mode of work performance and the location of the employer do not constitute obstacles, provided that the requirement of predominant activity within Italy is met.