Special fund for air transport: remuneration tax treatment for a pilot not resident in Italy

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The Italian Revenue Agency provided clarifications on the income tax treatment paid and received by a pilot resident in the Netherlands.

Following Reply n. 290 by the Italian Revenue Agency, clarifications were provided regarding the tax treatment of the wage supplement paid by the Fund for Air Transport and received by a pilot resident in the Netherlands.

For the purposes of taxing in Italy the income in question, Article 3, paragraph 1 of the TUIR provides that the tax must be applied to the total income of individuals, which is formed:

  • for residents by all income held net of deductible charges referred to in Article 10
  • for non-residents only by the income produced in the Italian territory.

Moreover, Article 23, paragraph 1, letter c) of TUIR specifies that compensation of employees received by non-resident persons is subjected to Italian taxation if the work activity is performed in Italy.

However, it is necessary to consider not only the Italian legislation, but also the international provisions contained in the agreements established between Italy and foreign countries. In the case described in the tax ruling, reference is made to Article 15, paragraph 1, of the Double Taxation Treaty between Italy and the Netherlands, which states that salaries or other similar remunerations are taxable either in the State of residence of the taxpayer or in the country where the activity is carried out.


As an exception, paragraph 3 of the same article provides the exclusive taxation in the State of residence of the taxpayer for the remuneration received as a result of an employment activity performed on aircraft used on international routes.

In 2020 and given the global pandemic that has also caused a stoppage of flights, the place where the worker has carried out the work activity in the previous period becomes crucial. It follows that, in accordance with Article 15, paragraph 1 of the International Treaty, the income paid to the pilot, who is resident in the Netherlands, is subjected to concurrent taxation in Italy and the Netherlands for the portion related to the employment activity carried out on board aircraft used for domestic (Italian) routes and any work done on land in Italy.

Differently, as provided in Article 15, paragraph 3, the portion of income attributable to international flights will be taxable exclusively in the State of residence of the pilot.

Regulatory Framework

Reply n. 290/2021

Reference (Italian only)

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