Further to Answer No. 345 of 17.05.2021, the Italian Revenue Agency provided clarifications on the application of conventional salaries for employees who work in smart working.
The Italian Revenue Agency has clarified that Conventional salaries (ex Article 51, paragraph 8-bis TUIR) cannot be applied to workers posted abroad who, as a result of the global pandemic, have carried out and carry out their work activity in Italy in smart working mode. Instead, the standard method of determining the employment income provided for in paragraphs 1 to 8 of Article 51 of the TUIR will apply.
The Italian Agency also specified that the OECD guidelines and provisions within the Agreements between Italy and other States cannot be used to interpret Article 51, paragraph 8-bis of TUIR. The tax system provided for in paragraph 8-bis shall apply if:
In conclusion, if the requirement of physical presence is not met, the Conventional salary will have to be re-proportioned and the employee income re-determined.
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