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How to recover taxes paid on stock options in case of non application of the impatriate tax regime

The Revenue Agency illustrated how to recover the higher taxes paid by employees due to the non-application of the impatriates regime in relation to employee earnings deriving from the exercise of stock options or from the maturation of the RSU.

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The Revenue Agency has recognized the possibility of reimbursing the higher withholding taxes due to the non-inclusion in the facilitated remuneration of the income from the exercise of the stock options or from the vesting of the RSU due to a problem in setting up the software used for processing of the instant company’s payslips.

Clarifications provided by circulars no. 17/E May 2017, and no. 33/E December 2020

In relation to the procedures for using the benefit and with the circulars of 23 May 2017, n. 17/E and 28 December 2020, n. 33/E, the Revenue Agency clarified that the worker concerned must submit a written request to the employer, who applies the benefit from the pay period following the request and, at the time of adjustment, from the date of hiring, by applying the deductions on the tax base reduced to percentage of taxable income. It is also specified that in the event that the employer has not been able to recognize the benefit, the taxpayer can benefit from it, in the presence of the requirements established by law, directly in the tax return.

In this case, the income from employment must already be indicated to the reduced extent. By reason of the literal data, as well as the purpose of the art. 16, Legislative Decree no. 147/2015 aimed at facilitating individuals who move to Italy to carry out their business, circular no. 17 / E of 2017 specified that the tax relief is applicable only to income that is considered to be produced in the territory of the State.

Consequently, the income deriving from activities performed abroad does not benefit from the tax benefit in question, even if received in the tax period in which the subject is fiscally resident in Italy.

The position taken by the Revenue Agency with reply n. 275 of May 2022

With the reply to ruling no. 275 of 18 May 2022, the Revenue Agency recognized the possibility of proceeding with the recalculation of the taxable salaried salary of the beneficiaries who benefit from the regime impatriates who, due to the lack of inclusion in the facilitated salary of the income deriving from the exercise of stock options or vesting of RSUs due to “a problem in setting up the software used” for processing the payroll of the instant company, they had not benefited from the facility even on those sources of income.

The Agency has in fact established that, in this case, it is possible to apply the tax relief for income deriving from the exercise of stock options or from the vesting of RSU and proceed with the reimbursement of the higher withholdings made by the employees of the company.

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Regulatory Framework

Circolare 17/E of 23 May 2017

Reference (Italian only)

Circolare 33/E of 22 December 2017

Reference (Italian only)

Reply n. 275 of 18 May 2022

Reference (Italian only)

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