PUBLISHED BY Arlati Ghislandi
Tax relief for incoming employees (“impatriati”) – clarifications on the requisite of residency

Concerning tax relief for incoming employees (“impatriati”), Agenzia delle Entrate provided clarifications on i) transfer of residency to Italy by the “impatriate” employee and ii) the requisite of residency in another State during the two tax periods prior to said transfer.


With answers no. 132 and 136 of December 27, 2018, Agenzia delle Entrate provided clarifications on the tax relief treatment for “impatriates” pursuant to art. 16, section 2 of Legislative Decree no. 147/2015.


Pursuant to said regulation, the transfer to Italy of employees with high qualification and specialization is facilitated, upon specific requisites (not examined here for the sake of brevity). The incentive, granted as long as the employee endeavors to remain in Italy for at least two years, consists in the application of income tax on 50% of the taxable income for the tax period in which the employee moves his or her residency to Italy and for the four successive tax periods.


Concerning the requisite of residency, it must be clarified that the employee may apply the tax relief as long as:

-        he/she has been resident abroad for at least two tax periods prior to the period in which the tax relief becomes applicable. Therefore, for at least the two periods prior to the transfer of residency to Italy, the employee must not have been enrolled in the registry list of resident population in Italy, nor have had his or her actual domicile or main center of affairs or interests;

-        he/she must maintain residency in Italy for at least two years, following transfer. It must be considered that, pursuant to art. 2 of Presidential Decree no. 917/1986, an employee is considered resident in Italy if, for at least 183 days in a year (184 in case of leap year), he/she has been enrolled in the list of resident citizens or, alternatively, elected domicile in Italy or was otherwise resident in Italy pursuant to Civil Code. It must also be specified that the incentive is applicable “from the year in which the employee acquires fiscal residency in the State and for the four successive tax periods in which the activity is mainly performed in Italy”.