Presumption of Tax Residence
Article 2, paragraph 2-bis of the Italian Income Tax Code (TUIR – Presidential Decree No. 917/1986) contains a specific anti-tax avoidance provision concerning the tax residency of Italian citizens.
Reversing the Burden of Proof:
This provision establishes a rebuttable presumption that an Italian citizen who transfers their residence to a country or territory identified as a “tax haven” or “blacklisted country” remains, notwithstanding the transfer, a tax resident of Italy. This means that even if they formally deregister from the Italian resident population registers (Anagrafe), and, for Italian citizens, register in the Register of Italians Resident Abroad (AIRE), they are still considered Italian tax residents (and hence liable to Italian tax on worldwide income) for income tax purposes, unless they can provide compelling evidence to the contrary.
Paragraph 2-bis introduces, through the introduction of a legal presumption, a switch of the burden of proof between the taxpayer and tax authorities. Instead of the tax authorities having to prove that a transfer of residence is not a valid transfer for tax purposes, such the the taxpayer remains liable to Italian tax on worldwide income, it is up to the taxpayer to prove, by reference to adequate supporting doumentary evidence, that there has been has a substantial and effective transfer of tax resdience abroad.
The rule is designed to discourage Italian citizens from transferring their tax residence to low-tax jurisdictions in order to avoid Italian taxation, without genuinely severing their ties with Italy. The burden of proof lies with the taxpayer to demonstrate that their move is genuine and that their center of vital interests (personal, family, and economic) and habitual abode is truly located in the foreign country.
The “blacklisted countries” are specifically identified by a Ministerial Decree. The main decree for individuals in this context is Ministerial Decree of 4 May 1999. It is important to note that this list has been subject to amendments over time, with countries being added or removed based on agreements, cooperation, and changes in their tax regimes. For example, Switzerland was recently removed from this specific blacklist for individuals, effective from fiscal year 2024.
Different Lists
Italy has various “lists” for different tax purposes for example:
- Presumption of Tax Residence
- Higher rate of IVAFE, and additional penalties for failure to report assets in certain jurisdictions in section RW of the annual tax return
- Controlled Foreign Companies (CFC’s) – the “black list of CFC’s was replaced in 2016 by an effective rate of tax and passive income test.
- Dividend participation exemption (although due to subsequent reforms reform a country test is no longer relevant.
- Deductibility of costs
- Financial Transactions
There is also “white list” of countries with which Italy has a treaty or other tax information exchange agreement. There are also separate lists aimed at financial intermediaries in terms of specific transaction reporting. These lists sit somewhat uneasily which each other, due to different nomenclature ascribed to jurisdictions and countries and due to the fact that some jurisdictions are included on more than one list.
On the whole the black list jurisdictions are
- countries with which Italy has no treaty, jurisdictions within treaty partners (e.g. Jersey, Netherlands Antilles)
- treaty partners where the treaty is partial in scope (e.g. Singapore)
- jurisdictions whose status in unclear or disputed as a matter of international law (Hong Kong, Taiwan, Macao)
and which are perceived by the Italian tax authorities to have a privileged tax regime.
EU Blacklist: There is also a separate EU list of non-cooperative jurisdictions for tax purposes, which is regularly updated. While this EU list is influential, it’s not directly the same as the Italian blacklist for individual tax residency purposes under Article 2, paragraph 2-bis, although there can be overlaps. The latest EU list (as of February 18, 2025) includes: American Samoa, Anguilla, Fiji, Guam, Palau, Panama, the Russian Federation, Samoa, Trinidad & Tobago, US Virgin Islands, and Vanuatu.
Updates and Treaties: Taxpayers should always verify the most current list published by the Italian tax authorities and consider the impact of any DTA’s between Italy and the country of relocation, as treaties can override domestic law in certain situations.
The nomenclature of the territory or jurisdictions should also be checked – the Italian nomenclature will prevail over the English language version below.
For the most precise and up-to-date information and consideration for your specific circumstances, either consult with us a qualified Italian tax advisor or referring to the official website of the Italian Tax Agency (Agenzia delle Entrate) is recommended.
Legislation
Article 2, paragraph 2-bis, of the Italian Tax code, approved by Presidential Decree No. 917 of December 22, 1986
- Decreto Ministeriale 4 maggio 1999 – Identifies 49 jurisdictions with privileged tax regimes under art. 2-bis, TUIR (presumption of fiscal residence for Italian citizens emigrating to these states).
- Decreto Ministeriale 23 gennaio 2002 – Updates the black list for Controlled Foreign Companies (CFC) under art. 167, TUIR, focusing on corporate tax avoidance.
- Decreto Ministeriale 3 aprile 2009 – Further updates the CFC black list under art. 167, TUIR, refining jurisdictions subject to anti-avoidance rules.
- Decreto Ministeriale 27 luglio 2010 – Removes Cyprus and Malta from the list of CFC’s .
- Decreto Ministeriale 12 febbraio 2014 – Removes San Marino from the CFC black list under art. 167, TUIR, following enhanced tax cooperation.
- Decreto Ministeriale 20 luglio 2023 – Excludes Switzerland from the art. 2-bis list due to effective exchange of information agreements.
Interpello
It is possible to make a request for an interpello (advance ruling) to the Italian tax Agency. however this procedure only allows the Tax Agency to advise on a point of law or interpretation of the law. They cannot (and typically specifically do not) answer the question of facts – e.g. whether the taxpayer has effective their tax residence (centre of vital interests /habitual abode). Some of the interpelli have been published on the Tax Agency website:
Risposta n. 63, 1 Feb 2020 indicates that Italian citizens registered abroad but maintaining significant ties (e.g. family, property) in Italy may still be considered Italian tax resident under Art. 2, para 2-bis. Agenzia delle Entrate
Resolution 72/E 26 September 2018 Addresses the case of an Italian citizen who moved to the UAE. Despite deregistration from Italian residency and registration with AIRE, the Agency presumed continued tax residency due to lack of sufficient proof of relocation. The agency requires verification of “effective” ties abroad (e.g., domicile, center of interests). The UAE’s black list status (per DM 4 maggio 1999) triggers the art. 2-bis presumption, shifting the burden to the taxpayer for “prova contraria”
Risposta n. 123, 23 January 2023 Evaluates whether employment income earned in Switzerland by a taxpayer registered with AIRE was taxable in Italy. Despite formal deregistration, the Agency presumed continued tax residency due to strong personal and economic ties, and concluded the income was subject to Italian tax.
| List of Countries from the Ministerial Decree of 4 May 1999 (G.U. n. 107 of 10/5/1999) and subsequent amendments – Countries with Preferential Tax Regimes for the Application of Article 2, Paragraph 2-bis TUIR | ||
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| A - F | G - N | N - Z |
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