Impatriate workers: new legislation and recent interpretations on smart working


published on 23 February 2021 | reading time approx. 5 minutes

It is inevitable that any tax provision that brings undoubted advantages to a certain category of taxpayers will somehow displease those excluded. 

This was the case when the Budget Law 2021 (L. 30 December 2020 n. 178, art. 1, c. 50) extended the number of beneficiaries of the new, generous tax benefits for “impatriate workers”, originally introduced with the Decree on Growth (DL 34/2019, art. 5), also to those who had taken up tax residence in Italy before the “cut-off date” of 30 April 2019. 

The extension from 5 to 10 tax periods in the presence of one or more minor children or in case of purchase of a residential real estate unit in Italy was thus granted on an optional basis also to those who had returned before the regulatory change, upon payment of a one-off amount calculated as 5 per cent or 10 per cent, as the case may be, of the share of income subject to the relief in the previous year.

The “unhappy” ones were represented by the group, albeit limited in absolute numbers, of “Teachers and Researchers”, who were the first, as of 2010, to be able to benefit from generous tax discounts (exemption of 90 per cent of income produced) if they returned to Italy to reside and carry out research and teaching activities (hence the commonly used expression “Return of Brains”). 

For them, in fact, there was no possibility of extension for those who had returned to the country before 2020 and therefore enjoyed the benefit in its previous, less advantageous formulation.

The recent Budget Law 2022 (L. 30 December 2021, no. 234) has remedied this disparity: in fact, Article 1, paragraph 763 of the same law has introduced the right, also for teachers and researchers who moved to Italy before 2020, to request the extension of the duration of the regime, originally provided for by Article 44 of Law Decree 78/2010, by paying a one-off fee. 

The “ordinary” duration of the scheme, equal to 4 years, can therefore be extended to 8 years in case of purchase of a property in Italy or of a dependent child, or up to 11 or 13 years if the number of dependent children increases, as provided for teachers and researchers returned from 2020 onwards. 

The requirement of registration to AIRE in order to be able to opt for the extension is somewhat perplexing, and is likely to lead to new disputes in an already rich jurisprudential vein: this approach can be said to be overcome by the wording of the currently enforceable provisions, which expressly provide for the possibility to prove tax residence on the basis of conventional principles (permanent residence, the “centre of vital interests”).

In any case, with this further regulatory change, the rules for teachers and researchers are aligned in the mechanism to those provided for the generality of impatriate workers. 

We would like to remind you that currently all workers, both Italian citizens and those from EU or non-EU countries, who come to work in Italy after at least two years abroad and remain there for at least two years can enjoy generous tax discounts: in fact, there is a “basic” exemption of 70 per cent of income (which can be increased to 90 per cent in case of residence in some disadvantaged regions of central and southern Italy) for five tax periods. 

The preferential period can be extended automatically, with 50 per cent income exemption, up to 10 tax periods if the worker has at least one dependent child or buys a residential property in Italy. 

If there are three dependent children, the exempted share of income in the extension period increases to 90 per cent.

In particular, it should be noted that under the current legislation there are no longer any requirements concerning the high qualification of workers, so that any individual producing income from employment (or similar), self-employment or business can benefit from the favourable regime.

In times of pandemic it is also appropriate to highlight the recent opening of the Revenue Agency on the issue of smart-working: with the answer to question No. 596 of 16 Sempteber 2021, the Tax Administration has admitted to the scheme an Italian citizen resident abroad for years who returned to live habitually in Italy but continued to perform in substantial continuity his work for the same non-resident employer in smart-working mode. 

In this case, the Agency has adopted an extensive interpretation, which does not require a discontinuity “in the content” of the work activity in order to benefit from the tax relief upon return to the country. 

This approach conflicts with the one adopted in the case of secondment of workers, where the Tax Administration is instead firm in upholding the need, in order to be eligible for relief, for a marked discontinuity of the relationship once the worker posted abroad returns to Italy, as recently reiterated in Circular no. 33/2020.



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Irene Menegon

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