Edition July: Global Updates on Tax Changes, Expatriates, and Employer Obligations

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The topics at a glance

• Tax​ »
• Law »
• Payroll »
• National Salary Tax​ »
• In the Spotlight: Italy Extends Grace Period for Non-EU Work Permit Renewal»

Tax

Abolishment of the Dutch tax-free “employee discount”  

What is the “employee discount” exemption?

The “employee discount” exemption is a tax-free discount an employer can give employees on company’s own products or services. This is part of the Expense Allowance Scheme (in Dutch: “Werkkostenregeling” or ‘’WKR’’). Under this exemption, an employer is permitted to provide an employee with a tax-free discount of up to 20% on the normal consumer price per product (including VAT), on products that are related to their business. This exemption is maximized at €500 per employee per year. 

This change affects dutch employers who offer employee discounts on companies own products.

What is changing?

It is recently announced that the Duch government wants to abolish this exemption. From 2027 onwards, any discount or reimbursement on your own products will in principle be treated as taxable salary for the employee, resulting in wage tax to be paid by the employee.  

Why are these changes introduced?

The Dutch government aims to: 

• Raise approximately €125 million to fund new energy measures.  

How do these changes work in practice?

• From 2027 onwards, any discount or reimbursement on your own products will in principle be treated as taxable salary for the employee, meaning wage tax becomes due. 
• Please note that there is still an option to give a tax free discount; 
• Within the “WKR”, every employer has a yearly tax-free budget for staff benefits (the “tax-free budget”); 
• The WKR’s discretionary allowance will be slightly expanded. In this regard, the first bracket, which covers the wage bill up to €400,000, will be increased from 2% to 2.16% (and remains at 1.18% for the amount above that); 
• Employers are allowed to designate the employee discount within this budget, where in that case it remains tax-free; 
• The downside is that this budget is limited: using it for employee discounts results in less budget for other benefits, such as (Christmas) gifts or staff events. 

Where do these rules apply?

These changes apply to employment situations in the Netherlands and are embedded in Dutch wage tax and income tax legislation. 

When do the changes take effect?

• 1 January 2027: Abolition of the “employee discount” exemption (Please note: this is an announced measure that still needs to pass the Dutch parliament, so details could still change. The official proposal is expected in September 2026). 

What is the purpose and impact?

This change means for employers: 

• If they currently offer employee discounts, the costs or your employees’ tax burden may increase from 2027; 
• Employers should consider reviewing their existing (discount) arrangements and/or analyze their remaining tax-free budget before the end of 2026. 

Law

Malaysia – Updates to the Framework for Expatriate Entry and Employment Authorizations 

Malaysia remains open to foreign professionals, but employers should note that the most significant recent change is not a new border closure or travel restriction. Instead, the key development is the revised expatriate employment framework that took effect on 1 June 2026. The new rules affect both new expatriate hires and renewals, particularly in relation to Employment Pass salary thresholds, duration, and supporting compliance requirements. 

Key change for employers 

The Expatriate Services Division (ESD) and MYXpats have announced revised monthly salary thresholds for Employment Pass categories with effect from 1 June 2026. The current framework sets Category I at 20,000 Ringgit Malaysia and above, Category II at 10,000 Ringgit Malaysia to 19,999 Ringgit Malaysia, and Category III at 5,000 Ringgit Malaysia to 9,999 Ringgit Malaysia, with a higher threshold of 7,000 Ringgit Malaysia for certain manufacturing-related cases. Employers should therefore reassess both pending and future expatriate cases against the revised salary bands before filing or renewal. 

Duration and succession planning 

The revised policy also introduces a more structured employment duration framework. Category I and Category II passes may be granted for up to ten years, while Category III is subject to a maximum period of five years. In addition, succession planning has become a more visible compliance issue, and employers should be prepared to show how the expatriate role supports knowledge transfer, workforce development, or localisation where required. 

Entry requirements remain relevant 

From a travel-entry perspective, foreign nationals must still ensure that they hold the appropriate visa or reference approval where required, and that their passport is valid for at least six months from the date of entry. Malaysia also generally requires foreign nationals to submit the Malaysia Digital Arrival Card (MDAC) within three days before arrival, although certain exempt categories may apply, particularly for some long-term pass holders. 

Impact on new hires 

For new expatriate hires, employers should confirm the appropriate Employment Pass category under the revised salary structure at the start of the process, verify whether a Visa With Reference or other immigration approval is required, and ensure that all travel and onboarding timelines account for MDAC and endorsement steps where applicable. Advance planning is recommended in order to avoid delays at the approval or entry stage. 

Conclusion 

Malaysia remains accessible for expatriate talent, but the compliance framework is now tighter and more structured. Companies planning new hires or renewals should conduct an early review of salary, category, duration, succession obligations, passport validity and visa requirements, to reduce processing risks  

Legal Consequences of the Application of Czech Social Security Law in the Absence of an Exception under Article 16 of Regulation (EC) No. 883/2004 

The cross-border posting of employees within the European Union entails a number of legal and administrative aspects, particularly in the field of social security. In practice, situations arise where, after the standard posting period has expired, no exception under Article 16 of Regulation (EC) No. 883/2004 is granted. Such a situation has significant implications for determining the applicable legal framework as well as for the employer’s obligations, including substantial financial and penalty risks. 

Determination of Applicable Legislation under EU Law 

The coordination of social security systems in the EU is based on the principle of a single applicable legislation, according to which a person is subject to the laws of only one Member State. The fundamental rule is the principle of the place of employment (lex loci laboris), under which an employee is subject to the legislation of the state in whose territory they perform their work. 

An exception is the institution of posting under Article 12(1) of the Regulation, allowing the employee to remain temporarily under the system of the sending state for a period not exceeding 24 months. After this period, an exception under Article 16 may be applied for; however, its granting requires agreement between the competent authorities and does not constitute a legal entitlement. If the exception is not granted, the legislation of the state of employment fully applies—in this case, the Czech Republic. 

Employer Obligations under the Czech Legal Framework 

According to Article 21(1) of Implementing Regulation No. 987/2009, the employer is required to fulfill all obligations arising from the applicable legislation as if it were established in the respective Member State. 

This includes in particular: 

• registration with the Czech Social Security Administration and health insurance funds, 
• maintaining statutory records and fulfilling reporting obligations, 
• calculation and payment of social security and public health insurance contributions. 

If these obligations are not fulfilled, the employer incurs retroactive liability for unpaid contributions from the date on which Czech law became applicable to the employee. Contributions are calculated according to Czech rates, amounting to 24.8 percent for social security (employer’s share) and 13.5 percent for health insurance. 

Sanctions and Financial Implications 

Unpaid or late-paid contributions result in the obligation to pay default interest, which amounts to approximately 12 percent per year. Additionally, fines may be imposed for breaches of statutory obligations, particularly for: 

• failure to comply with registration and reporting duties, 
• deficiencies in employee records, 
• violations of labor law requirements. 

The amount of these penalties may range from tens of thousands to several hundred thousand Czech crowns in more serious cases. 

Criminal Liability 

Failure to pay statutory contributions may constitute a criminal offense under Section 241 of the Criminal Code. If a legally defined threshold is reached (e.g., from CZK 100,000), penalties may include imprisonment of up to three years or a prohibition of activity. 

An important legal mechanism is the concept of effective remorse under Section 242 of the Criminal Code, which allows for the extinction of criminal liability if the obligation is fulfilled subsequently before the judgment is delivered. 

Practical Implications and Recommended Approach 

The absence of an exception under Article 16 has immediate practical consequences requiring prompt action by the employer. The following steps can be recommended in particular: 

• a comprehensive analysis of the factual situation and collection of relevant documentation, 
• calculation of outstanding contributions and related charges, 
• subsequent registration and submission of required reports, 
• settlement of liabilities, including the possible use of installment arrangements, 
• coordinated and transparent communication with Czech public authorities. 

Such an approach can significantly reduce financial and legal risks. 

Conclusion 

The refusal to grant an exception under Article 16 of Regulation No. 883/2004 leads to the clear application of the legal system of the state of employment. In the context of the Czech Republic, this entails the full scope of obligations in the field of social security and health insurance. Failure to comply with these obligations results in significant financial, administrative, and criminal risks. Early identification of the issue and proactive remediation are therefore crucial factors in minimizing negative impacts on the employer. 

New Dutch legislation: stricter rules for hiring temporary workers 

Are you a foreign company sending staff to the Netherlands, or do you hire out workers to Dutch clients? If so, there will be a change for you from 1 January 2027: you will be required to obtain official authorisation from the Dutch government before you are permitted to make workers available in the Netherlands. If you do not have this authorisation, you run the risk of being barred from the Dutch market altogether. In this article, we outline the key points of the new Act on the Authorisation of the Posting of Workers (the Wtta) for you. 

What is the Wtta and why does it exist?

The Wtta was introduced to exclude unscrupulous temporary employment agencies from the Dutch labour market and to protect migrant workers. Once in force, all agencies deploying workers in the Netherlands must hold an official licence. Dutch clients may only work with authorised agencies and are required to verify this via a public register. Working with an unauthorised agency puts them in breach of the law, meaning your Dutch clients will actively screen you before awarding contracts. 

Who does the Wtta apply to?

The Wtta applies to any company or legal entity that commercially “makes workers available.” This includes: 

• temporary employment agencies 

• secondment agencies 

• payroll companies 

The key criterion is always the same: making workers available means supplying workers to another party (in return for payment) to carry out work under that party’s supervision and management. If this applies to your business, the Wtta applies to you, regardless of what you call yourself. 

Timeline

Do not wait until 2027. The application process requires preparation and takes time. If you delay, you risk not being authorised by 1 January 2027. 

How do you obtain authorisation?

Apply via an online form on the portal of the Dutch Lending Market Authority (NAU): the new government body responsible for implementing the Wtta. The portal is accessible to foreign companies. 

To qualify, you must: 

• pay a security deposit of 100,000 Euro (or 50,000 Euro for a provisional authorisation if you are a new agency); and 

• submit an inspection report from an officially designated Dutch inspection body, demonstrating compliance with the regulatory framework 

Additional requirements for foreign agencies

As a foreign agency, you must also show that you are an identifiable company in your home country. This means providing: 

• a valid registration number 

• a payroll tax number 

• a VAT number 

What happens if you do not comply?

The NAU carries out periodic checks. If you no longer meet the requirements, your authorisation may be suspended, and you will be listed publicly in a national register.

Your Dutch clients also face risk. Companies working with an unauthorised agency are in breach of the regulations and may be fined. 

Already active in the Netherlands or SNA-certified?

Have you been operating as a staffing agency in the Netherlands for several years, or do you hold SNA certification? If so, you may be eligible for a transitional arrangement that could exempt you from the 100,000 Euro security deposit. Whether you qualify depends on specific conditions. Contact us — we are happy to assess your situation. 

Conclusion

The Wtta applies to all companies supplying workers in the Netherlands, including those operating from abroad. Your Dutch clients will only be able to work with you if you hold authorisation. Competitors who are already authorised will have a direct advantage on the Dutch market. 

Start your preparations now. Getting your administration in order, completing the application and undergoing the inspection all take time. Do you have questions, or would you like to know what the Wtta means for your business? Get in touch with us. 

Payroll

Vietnam’s New PIT Guidance and Payroll Documentation Trends 

Vietnam is expected to issue additional guidance for the implementation of the Personal Income Tax Law No. 109/2025/QH15 dated 10 December 2025 during 2026. The upcoming decree and circular may introduce changes affecting payroll administration, supporting documentation and dependent registration procedures. These developments are particularly relevant for multinational employers managing expatriate or cross-border payroll arrangements in Vietnam.

New implementation guidance expected in 2026

National Salary Tax

No deduction for income-related expenses if the employee uses his own car instead of his company car 

If an employee uses his own car for a business trip, he may claim the costs at their actual amount (see R 9.5, para. 1, sentence 3, LStR) or as a lump-sum amount currently set at Euro 0.30 per kilometer driven as income-related expenses, as long as the employer has not reimbursed the costs tax-free. 

In its decision of January 21, 2026 (VI R 30/24), the Federal Fiscal Court (BFH) ruled that this is not possible if the employee has a company car and would not have incurred any travel expenses when using it. In such cases, the employee’s expenses are generally deemed unreasonable and therefore cannot be fully recognized as income-related expenses. In the case in question, the employee used his personal car for three business trips because his wife needed the company car on those days. He claimed travel expenses for these trips at the actual rate of Euro 2.28 per kilometer driven as income-related expenses. The Federal Fiscal Court (BFH) confirmed the tax office’s position that the deduction of income-related expenses was not allowed in this case (see § 9(5), first sentence, in conjunction with § 4(5), first sentence, No. 7 of the Income Tax Act (EStG)). The expenses related to the employee’s standard of living and were considered unreasonable. 

Taxpayers are generally free to choose their means of transportation for business trips. However if they choose to use their personal car for such trips even though their employer has provided them with a company car for business use, the travel expenses incurred through the business use of the personal cari may affect the taxpayer’s standard of living if such use is based on private reasons and motives. In the case at hand, the Federal Fiscal Court (BFH) was of the opinion that this was the case. The employee would not have incurred the travel expenses if he had used the company car provided to him. A “reasonable and conscientious taxpayer” would not have borne the expenses incurred through the use of a private car in such a case.

No liability assessment if an application for a flat-rate income tax assessment under § 37b of the Income Tax Act (EStG) has been filed 

In its decision of January 21, 2026 (Case No. VI R 13/24), the Federal Fiscal Court (BFH) addressed issues relating to the procedural aspects of payroll tax, in particular the distinction between the employer’s liability and tax debt. It ruled that objections to the amount of the liability debt asserted in a liability notice cannot be based on the application of a lower flat-rate tax rate under § 37b of the Income Tax Act (EStG). 

Employees of the foreign parent company (hereinafter: “home company”) were seconded to Germany for a limited period. It was clear that Germany had the right to tax them. During the secondment, the home company paid contributions in its home country to a pension fund that granted the seconded employees direct, personal, and inalienable entitlements.  The amounts were charged to Germany. The German company did not withhold any wage tax in this regard. As part of an external wage tax audit, the tax office held the German company liable pursuant to § 42d(1) of the German Income Tax Act (EStG) for the wage tax attributable to the pension fund contributions, since the contributions for future insurance constituted cash wages and not benefits in kind. Thus, a lump-sum taxation of the payments pursuant to § 37b EStG was not possible. 

The employer argued that the contributions to foreign pension funds did not constitute wages subject to German taxation. In any case, however, the requirements for the flat-rate treatment under § 37b of the Income Tax Act (EStG) should be met, because the pension fund contributions constituted benefits in kind. 

The Federal Fiscal Court (BFH) did not rule on whether the pension fund contributions should be considered cash wages or wages in kind. It returned the case to the Fiscal Court (FG) because there was a violation of the fundamental rules of procedure that the court was required to address on its own initiative. This is because the Regional Tax Court should have postponed the proceedings regarding the legality of the liability notice in order to await the conclusion of a flat-rate assessment procedure under § 37b of the Income Tax Act (EStG). 

Section 37b of the Income Tax Act (EStG) allows employers the option to apply a flat-rate method, which must be used uniformly “for all” benefits and gifts provided during a fiscal year (see Section 37b(2) EStG). This option may be exercised by submitting a wage tax return in which the flat-rate wage tax is specified, or by providing a written or electronic declaration to the tax office. Objections to the legality of a wage tax liability assessment regarding the amount do not constitute the exercise of the option to apply the flat-rate taxation. 

The wage tax owed by the employee—for which the employer is only liable—differs significantly from the flat-rate wage tax that is owed by the employer. From a procedural standpoint, this is taken into account by asserting a liability claim against the employer as the liable party through a liability notice pursuant to § 191 AO and a tax liability claim against the employer as the taxpayer through a tax assessment notice pursuant to § 155 AO (additional assessment notice). 

A notice of additional assessment and a notice of liability do not concern the same subject matter of taxation and, therefore, do not concern the same subject matter of taxation. Consequently, a notice of liability for wage tax cannot be converted into a notice regarding the flat-rate tax under § 37b of the German Income Tax Act (EStG). In such a case, the tax office must first issue a negative decision on the application for a flat-rate tax if it intends to reject it, and may not simply issue a liability notice. 

If, however, it is questionable whether a benefit in kind exists for which the flat-rate taxation under § 37b EStG can be applied, the tax office may not simply issue a liability notice. A decision on the material law must be made in the proceedings concerning the application for flat-rate treatment under § 37b EStG. 

BFH decision on the “additionality” requirement for tax-exempt benefits 

Various wage tax benefits (e.g., tax exemptions or flat-rate options) require that the benefit in question be provided in addition to the wages already owed. 

Pursuant to Section 8(4), first sentence, of the Income Tax Act (EStG), this is the case only if 

• the benefit is not offset against the entitlement to wages, 
• the entitlement to wages is not reduced in favor of the benefit, 
• the benefit, which is intended for a specific use or purpose, is not granted in lieu of an already agreed-upon future increase in wages, and  
• if the benefit is terminated, the wages are not increased by the same amount. 

If these conditions are met, the additionality requirement is also fulfilled if the employee is entitled to this benefit under an employment contract or on the basis of another legal provision under labor or civil service law (such as an individual contract, a works agreement, a collective bargaining agreement, or a statute) (Section 8(4), second sentence, of the Income Tax Act (EStG)). 

In its decision of January 21, 2026 (Case No. VI R 25/24), the Federal Fiscal Court (BFH) ruled that the “entitlement to wages” refers to the entitlement existing at the time of receipt and thus to the base wage subject to wage tax and social security contributions. Voluntary employer benefits are therefore not part of the wages owed in any case, but are in addition to them. 

Therefore, the “additionality” requirement is also met if the employer offsets a voluntary additional benefit against another voluntary benefit. This is because such an action does not affect the employee’s entitlement to the wages that are already owed. The same applies if a (specified-purpose) benefit provided by the employer based on a voluntary commitment is reallocated to a different purpose. Even such a “conversion” does not change the voluntary nature of the benefit. 

In the case at hand, the employer had announced in May 2020 that he would make a special payment in the middle of the year and another at the end of the year, if business performance was good. It was pointed out that the special payments were made on a voluntary basis and were not mandatory. In May and November 2020, the special payments were partially paid out tax-free as COVID-19 payment. 

The Federal Fiscal Court (BFH) confirmed that the requirements for the tax exemption under Section 3 No. 11a of the Income Tax Act (EStG) had been met. Under this regulation, in addition to the wages already owed, any assistance and support granted by employers to their employees in the form of cash payments and benefits in kind during the period from March 1, 2020, to March 31, 2022, due to the COVID-19 crisis, are tax-exempt up to an amount of Euro1,500. The law does not require that the employees have suffered a specific (individual) financial burden as a result of the COVID-19 crisis. The Federal Fiscal Court (BFH) therefore considered it sufficient that the special payments were made in May and November 2020 specifically designated as “special COVID-19 payments” and were thus temporally and factually related to the COVID-19 pandemic. The fact that the payments in May were announced not as COVID-19 payment but as general voluntary special payments was not considered as a negative factor. 

Is a benefit in kind considered when a credit is granted for the purchase of target vouchers from selected retail partners?  

An appeal is pending before the Federal Fiscal Court (BFH) under case number VI R 3/26 regarding the question of whether gift vouchers or prepaid cards also qualify as benefits in kind that remain tax-exempt under the monthly Euro 50 non-cash benefit exemption limit, or may be taxed at a flat rate under § 37b of the German Income Tax Act (EStG) if they entitle the recipient exclusively to obtain one or more other gift vouchers, and the gift voucher that can be obtained with the initial gift card themselves meets the requirements of § 8(1), sentence 3, EStG and would thus have qualified as benefit in kind (if provided directly by the employer). 

Context: According to Section 8(1), second sentence, of the Income Tax Act (EStG), income in cash has (since 2020) included cash payments for specific purposes, retroactive reimbursements, cash substitutes, and other benefits denominated in a monetary amount. However, under Section 8(1), third sentence, of the German Income Tax Act (EStG), gift vouchers and prepaid cards continue to be regarded as benefits in kind if they entitle the recipient exclusively to purchase goods or services from the employer or a third party and meet the criteria of Section 2(1)(10) of the Payment Services Supervision Act (ZAG). In the opinion of the tax authorities, this is not the case for gift vouchers and prepaid cards that are exclusively redeemable for other gift vouchers or prepaid cards. An exception applies if redemption is possible only for other vouchers that are themselves considered benefits in kind (i.e., they cannot be redeemed in a marketplace) and the credit balance becomes available to the employee only after selecting the other voucher (e.g., selection prior to activating a voucher code or prior to loading the credit onto the prepaid card) (see Margin Note 24 of the BMF letter dated March 15, 2022). 

Employers who wish to provide their employees with universal gift cards or gift vouchers that can be redeemed in gift card platforms should carefully monitor legal developments in this regard. 

Update on Corporate Fitness Benefits: “Health Allowance” not applicable 

In March 2025, the tax authorities issued nationwide guidelines on the income tax treatment of so-called corporate fitness programs. They have now amended these guidelines to include a provision for the so-called prevention component, which some providers have included in their programs. 

Corporate fitness programs provide employees with paid access to a wide range of sports and health services offered by various providers at their facilities (e.g., gyms, swimming centers) or to online courses. Some providers divide the monthly employer contribution into access to sports programs and access to online prevention courses on topics such as exercise, nutrition, stress management, prevention of addiction, etc. No records are kept of which employee participated in which course, nor are any certificates of participation issued. 

The question was whether the tax exemption under Section 3, No. 34 of the Income Tax Act (EStG) (the so-called “health allowance”) applies to this portion of the company’s fitness contribution. In the past, some tax offices have affirmed this in advance rulings under Section 42e of the German Income Tax Act (EStG). However, the tax authorities no longer adhere to this view, meaning that employers must expect revised advance rulings. 

Going forward, therefore, the benefit in kind derived from corporate fitness programs must generally be valued at the usual retail price at the place of sale, as defined in Section 8(2), first sentence, of the German Income Tax Act (EStG). This is typically the price that private end consumers must pay for comparable offerings on the market. 

If the corporate membership is offered only to employees of certain employers (so-called corporate clients) or to employer-independent groups, but not—or not under comparable terms—to private end consumers on the market, the valuation may be based on the corresponding expenses incurred by the employer, including value-added tax and all incidental costs. This includes expenses borne by the employer that, if valued in accordance with the principles of Section 8(2), first sentence, of the German Income Tax Act (EStG), would not be classified as wages due to the employer’s predominantly self-interested motives (e.g. setup fees). 

The following principles must be observed when allocating and attributing the recurring and one-time costs borne by the employer: 

Allocation Among Employees

• If the employer incurs recurring or one-time costs that can be directly attributed to the respective employees, these costs must be allocated to the individual employees. 
• If the employer incurs recurring or one-time costs that cannot be directly attributed to the registered employees (employees who have actually accepted the offer), these costs must be allocated equally among the registered employees. 
• If the employer incurs recurring or one-time costs regardless of the number of registered employees, these costs must be allocated to the number of employees who could accept the offer. This allocation includes those employees to whom the employer grants eligibility to participate, limited, if applicable, to a contractually agreed-upon maximum number of employees. 

Allocation of one-time costs over time

One-time costs that arise over a specific period in accordance with the contractual agreements must be allocated evenly over the term of the contract. If no period is specified in the contract, one-time costs must be allocated evenly over the minimum contract term or the period until the earliest possible termination. These costs must then be allocated to employees in accordance with the principles set forth in (a). 

Attribution

A monetary benefit arises only for employees who have actually accepted the offer (registered employees). Whether the employee actually uses the individual offers is irrelevant. 

If the employer has incurred one-time costs regardless of the number of registered employees, the number of employees at the time the contract is concluded or at a contractually specified date may be used to determine the proportionate costs for all employees who could accept the offer. This also applies if the actual number of employees changes during the term of the contract. This portion of the benefit in kind can therefore be determined at the beginning of the contract term. 

Membership fees for sports clubs, fitness centers, and similar facilities do not fall under Section 3 No. 34 of the Income Tax Act (EStG) (see Margin Note 34 of the Federal Ministry of Finance [BMF] letter dated April 20, 2021). The same now applies to the prevention component included in corporate fitness programs. This is because the contractual structure does not allow for verifiable actual participation in the prevention courses, nor is there any provision for assigning them to a specific employee. In addition, the Prevention Guidelines of the GKV-Spitzenverband, revised in December 2025, include a provision regarding online courses stating that a certificate of participation must also be submitted for digital offerings. This would not be guaranteed in the case of corporate fitness programs. Furthermore, the benefit in kind from the company fitness program accrues to the employee as soon as the possibility of participation is granted; actual participation is irrelevant. 

In the Spotlight: Italy Extends Grace Period for Non-EU Work Permit Renewal

The recent reform introduced by Legislative Decree no. 83/2026 brings targeted changes to the Italian immigration legal framework, particularly with regard to the timing and conditions governing residence permit renewals. The measure extends the applicable deadlines and introduces a new electronic permit format, with the aim of streamlining existing procedures and aligning national law with recent EU developments. 

Extended Timelines and a New Electronic Permit Format

Legislative Decree no. 83/2026, effective as of 22 May 2026, completed the process of implementing Directive (EU) 2024/1233 of the European Parliament and of the Council of 24 April 24 2024, relating both (i) a single application procedure for the issuance of a single permit that  allows third-country  nationals to reside and work in the territory of a Member State and (ii) a common set of rights for third-country workers  who legally reside    in a  Member  State. In particular, under the amended Article 5 of the Italian Consolidated Immigration Act, the window for applying for permit renewal has been extended:   

• applications may be submitted up to 90 days before expiry (previously 60 days);  
• applications must be filed no later than 60 days after expiry (previously 30 days); 

This extension gives workers and employers extra time to complete the necessary paperwork while keeping workers’ legal status valid. The reform also introduces a new electronic residence permit (“perm. unico lavoro”), which consolidates, on a single document:  

• the individual’s residence permit and relevant employment details, including the terms of employment, procedural rights, the guarantees provided to workers (primarily subordinate employees) and their families.  

The Decree at stake, and so the relevant amendments to the Italian Consolidated Immigration Act, has entered into force as of 4 June 2026, thus aligning Italian practice with the standards set by EU Directive 2021/1883 on the single permit procedure. The new regulations entered into force on 22 May 2026. 

Scope, Exclusions, and Continued Right to Work Pending Renewal

It is important to note that the new electronic single-permit format does not apply universally. In line with EU Directive 2024/1233, several categories of permit holders are expressly excluded from its scope:  

• autonomous workers and investors;  
• highly specialized personnel, intra-company transferees, and posted workers;  
•  students, researchers, and seasonal workers;  
• beneficiaries of temporary or special protection, as well as other protected categories (e.g. victims of exploitation or domestic violence). 

These categories retain their own specific permit types.  

A critical practical provision, set out in Article 5 of the Italian Consolidated Immigration Act, clarifies that even where the 90-day advance application window or the post-expiry deadline is not complied with, a foreign national may still lawfully remain in Italy and carry out temporary work activity, provided the other legal requirements (such as, for example, the availability of sufficient means of subsistence for the duration of the stay) are satisfied and until the competent public security authority issues any formal communication to the contrary (including notification to the employer). The right to work in this interim period is conditional on the worker having received the official receipt (“ricevuta”) confirming that an application for issuance, renewal, or conversion of the residence permit has been duly lodged. 

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