This guide is intended to provide general information about the tax residency certificate in Italy, why to apply for it, and how you can obtain it through the Italian Tax Agency.
What is the Italian tax residency certificate?
The tax residency certificate in Italy is a document issued by the Italian Tax Agency that serves to certify that the tax domicile of the company or person in object is in Italy.
This certificate may be requested in order to submit it to the tax administration of a foreign state, in which the taxpayer has generated income in a given year, in order to take advantage of the benefits provided by the double taxation convention in force with that state.
Who can apply for it?
This certificate can be requested by all resident individuals and resident entities other than individuals such as: corporations, commercial and non-commercial entities, collective investment schemes and pension funds.
In the case of partnerships and other cases of “fiscally transparent” entities, the certificate can only be requested by partners/beneficiaries resident in Italy.
When is the tax residence certificate needed?
The tax residence certificate can be applied at the Italian Tax Agency to be submitted to the foreign state in which the taxpayer generated income in a given year. The certificate is required to avail of the benefits of international conventions against double taxation on income.
The certificate may also be requested for more than one type of income produced in the same foreign state, i.e. subject to the same convention; in this case, in fact, a single tax residence certificate will be issued.
How to apply for the tax residency certificate in Italy?
The application can be submitted at any territorial office of the Italian Tax Agency. In fact, the certificate template, approved by the Director of the Tax Agency on July 10, 2013, is made available electronically free of charge by the Italian Tax Agency.
It is necessary to fill out the application form in all its fields, such as:
- Status of: in this section it should be indicated whether you are the company owner, representative or other status;
- Country: in this section, you must indicate the name of the foreign state in which the income was produced and to which the certificate should be delivered;
- Income: in this section it is necessary to indicate the type(s) of income produced, subject to the International Double Taxation Conventions, taking into consideration the table available on the form, which can be consulted at the following link.
The issuance of the certificate is subject to the payment of a special tax of €3,10 for each copy requested. Payment can be made by Form F23 using tax code 964T at bank counters and post offices. Alternatively, a revenue stamp of equal amount can be used.
Approved template for the certificate
The certificate template approved in Italy, which can be used by non-residents to obtain direct application of the conventional withholding tax or exemption from Italian tax or refund of Italian tax, have not been agreed in advance with other foreign tax authorities.
In fact, according to a prevailing EU and international trend, the models are the result of a unilateral initiative by Italy. This initiative is mainly motivated by the need to facilitate non-resident investors who wish to directly avail themselves of the benefits provided by the double taxation conventions on the relevant European directives or to obtain a refund of the Italian tax paid or withheld in excess of the amount set by the same conventions and directives.
Tax residence certificates issued by foreign administration based on the template of that foreign state
The tax authority in a foreign state may issue the tax residence certificate without using the form made available by the Italian Tax Agency. In details, the tax authority in the country of residence of the income recipient may decide to use its own form to be attached to the application for refund or direct application of the exemption or conventional rate. In this case, the form issued by the foreign tax authority must certify the beneficiary’s residence under the relevant conventional rule in the in the tax period or on the date of issuance of the certificate.
Where the foreign tax authority provides for the issuance of the certificate by electronic procedures, the validity of the document must be verifiable.
Tax residence certificates issued by the Italian Tax Agency based on the template of a foreign state
There may also be cases in which the foreign tax administration requires the Italian Tax Agency to complete its own had hoc template, asking the Italian Tax Agency to stamp it and sign it. In such cases, if the form prepared by the foreign administration is substantially similar to the Italian form, the Italian Tax Agency may certify tax residence in Italy using the foreign form. This is applicable both in order to facilitate Italian taxpayers applying to a European Union member state or a convention partner state for a refund of the foreign tax or direct application of the preferential rate.
In such an event, the Italian Tax Agency office will still issue the tax residence certificate also on the model approved by the Italian Tax Agency. In fact, the issuance of the Italian certificate means compliance with domestic administrative obligations while the certificate of residence on the model prepare by the foreign administration is functional to allow Italian taxpayers to avoid difficulties with tax administrations.
How long does the tax residence certificate last?
The tax residence certificate can be obtained upon request and usually relates only to the relevant tax year shown on the certificate itself.
When the tax residence certificate must be presented to a foreign authority, it may be needed to legalize it for use in that country.
Difference between civil residence and tax residence
The concept of civil residence and tax residence are often confused and swapped, however there is an important difference between the two.
The concept of civil residence is defined by Article 43 of the Civil Code as “the place where the person has his/her habitual abode”. The concept of domicile is governed by the same article and defined as “the place where the person has established the principal seat of his/her business and interests”.
Therefore, the address of registered residence and the address of domicile may coincide, but they may also not coincide. Registration in the Registry of Resident Population is obtained by registering with the Italian Municipality where they have an accommodation.
Where necessary, you can apply to the Municipality for a residence certificate, which is different from the tax residence certificate covered in this article, and which is issued with a validity of 6 months. The address of domicile, instead, can generally be self-certified.
Tax residence is a different concept and it represents the territory where the person may be liable to pay taxes.