“Impatriates” – 70% Tax break to attract “human capital” to Italy

2019 Changes

The Italian Government has recently modified the special tax regime designed to encourage the movement of “human capital” to Italy (lavoratori impatriati”).

  • The new regime increases the exempt portion to 70% – so only 30% of gross salary/net profit  is liable to income tax.  100% of salary continues to be liable to social security under normal rules
  • The regime applies for five consecutive accounting periods, until revoked or until the conditions for the relief cease to apply
  • The requirement to have a University decree/highly specialized job has been abolished
  • The requirement to perform services for an Italian company (or foreign company belonging to an Italian group) has been abolished. The geographical requirement is now that the work is performed mainly in Italy
  • Now to qualify you must have been tax resident outside Italy in the two tax periods preceding the year in which you transfer to Italy
  • You must commit to reside in Italy for at least two years.
  • You need to be tax resident in Italy in the first year in which you move, or the year immediately following the year of the move, if you move in the latter half of any year.
  • The exempt portion is 90% (so 10% taxable)  if you take up residence in one of the regions of Abruzzo, Molise, Campania, Puglia, Basilicata, Calabria, Sardinia, Sicily

The income tax exemption applies for a further five tax periods to an individual worker who is an EU citizen

  • with at least one minor (under 18) or dependent  (over 18 but in full time education) child; and
  • who becomes the owner of at least one residential property in Italy after moving (or  12 months prior to becoming tax resident).
  • during the extension period, the tax exemption drops to 50%, but goes to 90% for impatriates with at least three minor or dependent children.

If you are an employee you need to make a written letter of request to your employer.  For the self-employed (and those employees who have not presented the letter of request in time) the benefit can be claimed in the relevant annual tax return which will generate the refund either via your payslip, a payment from the authorities or credit to offset future tax liabilities. We can assist with the refund claim.

If you would like advice on whether you qualify for the relief and/or a pre-compiled copy of the letter you need to send your employer please get in touch

Legislation and guidance (mainly in Italian)

Article 5 Decree law no. 34 /2019

Tax Agency Circular no 17 /E of 23 May 2017

Tax Agency Circular no 33/E of 28 December 2020

Risoluzione n. 72 del 26 settembre 2018 – pdf  – Impatrio dei soggetti di cui all’articolo 16 del decreto legislativo 14 settembre 2015, n. 147 – Attività lavorativa prestata in Italia e all’estero per società appartenenti ad un gruppo multinazionale

Risoluzione n. 51 del 6 luglio 2018 – pdf  – Residenza fiscale all’estero prima dell’impatrio per i soggetti di cui all’articolo 16, comma 2, del decreto legislativo 14 settembre 2015, n. 147

Risposta a Interpello n. 492 2019 – assignment to France  – importance of lack of continuity

Risposta a Interpello n. 495 2019 – taxpayer coming from Ireland – taxed in full on first year (as non resident), commencement of special regime starting from first year of tax residence and following four years

Risposta a Interpello n. 497 2019 – taxpayer working abroad, not registered with the AIRE

Risposta no 59/2020 – Timing of the benefit – interaction between time of starting work and first year of tax residence  – importance of claiming relief either by reques to the employer or in tax return for first period of residence

Risposta a Interpello no 533 2020 – Two years residence abroad for study purposes (Master’s Degree) not sufficient

Risposta n. 42/2021 – Employee assigned abroad, returning to Italy – importance of non continuity

Circolare n. 17 del 23 maggio 2017 – pdf  – Regimi agevolativi per persone fisiche che trasferiscono la residenza fiscale in Italia

Tax Agency Guidebook (in English) – incentives for attracting human capital to Italy

Italian Tax Agency Website


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