Below is a brief summary of the “Impatriati” Italian Tax Regime (formerly Article 16, Legislative Decree No. 147/2015) in effect from January 1, 2024.
Conditions of eligibility
- Workers commit to being tax residents in Italy for at least 4 tax periods;
- Workers must not have been tax residents in Italy in the 3 tax periods preceding their transfer;
- Post-return work activities must be primarily carried out in the Italian territory (i.e., > 183 days);
- Workers possess high qualification or specialization requirements (according to Legislative Decrees no. 108/2012 and 206/2007).
The requirements of high qualification or specialization (according to no. Legislative Decrees 108/2012 and 206/2007) apply in the following cases:
- Attainment of a higher education degree issued by competent authorities in the country where it was obtained, certifying the completion of a higher education program lasting at least three years and the corresponding higher professional qualification, falling within the levels:
- (legislators, entrepreneurs, and top executives);
- (intellectual, scientific, and highly specialized professions); and
- (technical professions) of the ISTAT classification of professions CP 2011, certified by the country of origin and recognized in Italy.
2. Possession of the requirements prescribed by Legislative Decree November 6, 2007, No. 206, limited to the exercise of the professions regulated therein.
In the case of “intragroup transfers” of employees:
For impatriated workers who work in Italy for the same entity for which they were employed abroad before the transfer (e.g., remote work with a non-resident employer) or for an entity belonging to the same group, the minimum stay requirement abroad (prior to the transfer to Italy) is raised to:
- 6 tax periods if the worker has never been previously employed in Italy by the same entity or an entity belonging to the same group.
- 7 tax periods if the worker, before the transfer from Italy abroad, was employed in Italy by the same entity or by an entity belonging to the same group.
Entities belonging to the same group are those that have a direct or indirect control relationship under Article 2359, paragraph 1, number 1) of the Civil Code or are subject to common direct or indirect control by another entity.
The benefit will be a 50% tax exemption on income from dependent work (employment income), income assimilated to dependent work, and income from self-employment resulting from the exercise of arts and professions, up to a maximum of €600,000 per year.
The incentives will apply for 5 years, considering the first period when tax residency is transferred or re-transferred to Italy. There is a forfeiture clause if tax residency in Italy is not maintained for at least 4 (seemingly on a calendar year basis), with recovery of underpaid taxes and related interest.
Additional benefits for minor children
For individuals transferring to Italy with a minor child, the tax exemption percentage will be 60% (instead of the ordinary 50% rate). The same increase in the benefit applies to those who become parents or adopt a minor during the period of enjoying the Impatriati regime. It should be noted that this additional benefit requires that the minor child be and remain tax resident in Italy.
The benefit of the increased tax exemption can be applied starting from the tax period in progress at the birth or adoption of the child and for the remaining time of the facilitated five-year period.
Three-year extension, but only for transfers in 2024
The ordinarily eligible period of benefit (i.e., the five-year period) can be extended for an additional three years.
In this case, the tax exemption rate remains at 50%, while still verifying the access requirements of the new regime.
However, this extension is limited to the specific scenario of changing official residence during 2024 and acquiring a residential property for the main residence in Italy by December 31, 2023, or within the 12 months preceding the transfer to Italy.