Introduction
The case examined by the Court of Cassation, concluded with ruling No. 24972 of 3 September 2026, revisited and confirmed important principles on tax residence and on the obligations to monitor investments and financial assets held abroad. In particular, the Court reaffirmed that tax already paid in Italy on sums deposited abroad does not exclude, where due, the obligation to report those assets on the RW Form.
The decision therefore draws attention to two distinct issues: the correct determination of the taxpayer’s residence, and the verification of the reporting obligations relating to foreign financial assets.
The Case
The matter on which the Court of Cassation was called to rule concerns a failure to declare foreign financial assets for tax years 2008, 2009 and 2010, by a taxpayer married to a resident of San Marino, who held a permanent residence permit and worked in San Marino’s territory.
The facts appeared to suggest that the centre of the taxpayer’s personal interests was abroad, and that her tax residence should therefore be attributed to San Marino rather than Italy. The taxpayer had, however, remained registered in Italy’s civil registry of the resident population, without registering with the AIRE (the Register of Italians Resident Abroad).
The funds held abroad came from the sale of a property located in Italy and from an end-of-service severance payment paid by INPDAP (the Italian public employees’ pension institute), on which Italian taxes had already been paid.
The Regional Tax Court of Emilia-Romagna had upheld the taxpayer’s appeal, giving weight to her ties with San Marino and holding that her de facto residence abroad prevailed over her Italian civil registration. The decision was subsequently challenged by the Italian Revenue Agency, which contested both this reconstruction of tax residence and the relevance attributed to the origin of the funds and to the tax already paid on them.
Determining Tax Residence and Civil Registration
A first key reference made by the Court concerns Article 2(2) of the Italian Income Tax Code (TUIR), in the version applicable to the tax years at issue. The law set out three alternative criteria for determining whether a person was tax resident in Italy: registration in the civil registry of the resident population, domicile, or civil-law residence in Italian territory, for the greater part of the tax year.
It was sufficient for just one of these conditions to be met: registration in Italy’s civil registry for the greater part of the year therefore constituted an autonomous criterion, with no need to also verify domicile or civil-law residence.
The Court of Cassation reaffirmed this principle in its ruling, excluding that de facto relocation abroad could override civil registration, and held that the permanent residence permit in San Marino was not sufficient to exclude the taxpayer’s Italian tax residence, given that she remained registered in Italy’s civil registry. It follows that the Regional Tax Court, by giving prevalence to de facto residence abroad, had misapplied the legislation applicable to the years in dispute.
It should be noted that, under Article 1 of Legislative Decree No. 209/2023, whose amendments apply from 1 January 2024, maintaining one’s civil registration now constitutes a rebuttable presumption of Italian tax residence, which the taxpayer may therefore prove otherwise. Civil registration thus retains relevance, but the taxpayer may prove that the other criteria for establishing Italian tax residence are not met: civil-law residence, domicile — understood as the centre of personal and family relationships — or physical presence in Italy for the greater part of the tax year.
The principle applied to tax years 2008-2010 should therefore not be automatically transposed to current situations: it is necessary to identify the relevant year and the provisions applicable to each case, without conflating physical relocation to a foreign State with its tax consequences.
The RW Form and Sums Already Taxed
The ruling also examines the monitoring obligations set out in Article 4 of Law Decree No. 167 of 1990 and the related penalties under the following Article 5. The Court of Cassation notes that declaring financial assets held abroad and paying income tax are separate obligations.
Monitoring foreign investments through the RW Form is, in fact, an autonomous reporting obligation that allows the tax authorities to be informed of foreign assets and financial transactions. For this reason, the tax already paid on the severance payment, and the fact that other funds derived from the sale of an Italian property, did not justify the failure to complete the RW Form.
The Court of Cassation classified the failure to declare as a substantive violation, since it prevents the tax authorities from obtaining the information needed for monitoring purposes. The principle applies to situations where the reporting obligation exists: it does not mean that every foreign asset must be reported without regard to the conditions and exemptions set out in the applicable rules.
The Court of Cassation’s Decision
The Court upheld the Italian Revenue Agency’s appeal, setting aside the Regional Tax Court’s earlier judgment and dismissing the taxpayer’s original challenge to the penalty notice.
The ruling does not introduce a new obligation to declare foreign investments, but confirms principles already established in case law: tax residence must be assessed under the rules applicable to the relevant period, and tax already paid on the funds does not remove the separate monitoring obligations.
Practical Implications: Why It Is Important to Review Your Tax Position
The ruling offers a practical takeaway for situations similar to the one at issue: tax residence, the income tax return and the monitoring of foreign assets must be assessed together, though they should not be treated as equivalent obligations.
The starting point is reconstructing the taxpayer’s personal and civil-registration situation, paying particular attention to the periods during which foreign assets were held and to returns already filed, taking into account the rules applicable to each year.
Where foreign accounts or investments are held, it is therefore advisable to assess one’s position before concluding that tax already paid, or relocation abroad, rules out further reporting obligations.
Sources
- Court of Cassation, Tax Division, ruling of 3 September 2026, No. 24972.
- Presidential Decree No. 917 of 22 December 1986 (TUIR), Article 2(2) — text applicable to tax years 2008-2010 and text as amended by Legislative Decree No. 209/2023.
- Law Decree No. 167 of 28 June 1990, converted into Law No. 227 of 4 August 1990, Articles 4 and 5.
- Legislative Decree No. 209 of 27 December 2023, Articles 1 and 7(1).
- Italian Revenue Agency, Circular Letter No. 20/E of 4 November 2024.