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Special tax regime for researchers, extension by September 27th 2022

The Italian Revenue Agency has set a new exceptional deadline to apply for the extension of the impatriate tax relief for researchers and teachers.

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In Circular No. 17 of May 25, 2022, the Italian Revenue Agency provided the necessary clarifications for researchers and teachers, registered with Aire or EU citizens who returned to Italy before 2020, to apply for the extension of the impatriates tax regime.

Conditions for researchers to request the extension of the tax bonus

The Italian Revenue Agency has cleared the doubts of researchers and teachers who returned to Italy from abroad before 2020 and intend to benefit from the tax break up to a maximum of thirteen tax periods in total. Article 44 of Decree-Law No. 78/2010 introduced the benefit in question, which was later amended by Article 5 of the “Growth Decree” for individuals who acquire tax residence in our country starting from 2020 and more recently, by the Budget Law 2022 (Article 1, paragraph 763).

The ordinary duration of the Irpef tax break was equal to four years in the original wording and has been extended to five years from 2020, provided that tax residence remains in Italy.

Budget Law 2022 established that, teachers and researchers registered with Aire or EU citizens, who transferred their residence to Italy before 2020 and who, as of December 31, 2019, were already beneficiaries of the preferential regime, can extend the application of the regime up to 8, 11 or 13 tax periods in total. Taxpayers must have become owners of a home in Italy subsequent to the transfer, either within the previous 12 months or within 18 months from the date of exercising the option and/or have one to three minor children. The extension of the scheme is finalized by paying an amount that varies according to the number of children.

The circular also specifies that the conditions required to extend the benefit  must be possessed by teachers and researchers at the time the option is exercised.

In particular, the requirement of the presence of at least one child and/or three minor children, including in pre-adoptive foster care, must exist in the tax period in which the payment of the amounts provided for in the rule is made. In the event that the children become of age during the period of extension of the incentive the benefit, the circumstance does not result in the loss of the tax benefit.

The conditions that allow the continuation of the tax incentive also include the purchase of a home, “within 18 months from the date of exercising the option“: the term is to be calculated according to the common calendar, intended as the period starting from any day of the year and up to the day before the conclusion of the 18 months following the payment date.

For example, the circular points out that:

“a payment made by Feb. 10, 2022 requires that the purchase of the property unit must be completed no later than Aug. 9, 2023”.

The deadline of September 27th 2022

Regarding the procedures and deadlines to apply for the extension, Circular No. 17 of May 25, 2022 established that employees must apply for the extension of the benefit to their employer, who shall make the relevant tax withholding. Self-employed workers, on the other hand, report the extension in the tax return for the year of payment.

The request to the employer and the one-time payment must be made by June 30 of the year following the end of the first period of application of the special scheme. Exceptions to this are situations in which the first four-year period ended by December 31, 2021, in which case the deadline to be met to continue taking advantage of the bonus is September 27, 2022.

Therefore, in order to perfect the option, teachers and researchers (whether employed or self-employed) must pay by that date:

  • 10% of the taxable income from employment and self-employment produced in Italy, related to the tax period preceding the one in which the option is exercised, if the taxpayer at the time of exercising the option has at least one minor child, including in pre-adoptive foster care, or has become the owner of at least one residential property in Italy, subsequent to the transfer or in the twelve months preceding the transfer, or within eighteen months from the date of exercising the option.
  • 5% of the same income indicated in the previous point, if there are at least three minor children, including in pre-adoptive foster care, and the taxpayer becomes or has become the owner of a residential property. The housing unit may be purchased directly by the worker or by the spouse, cohabitee or children, including in joint ownership.

Please note that the special tax regime is now available also in the case of teaching and/or research activities abroad with unpaid leave and also in the event that the teaching and/or research activity is not carried out in the immediately preceding two years. Learn more in our dedicated article.

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Regulatory Framework

Article 44 of Decree-Law No. 78/2010

Reference (Italian only)

Circular No. 17 of May 25, 2022 

Reference (Italian only)

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