Italy: Further Changes to the Inpatient Regime (Studio Ferrari & associati)

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April 18, 2021 - Ferrari & Associati – Studio Legale e Commerciale


This is a Thought Leadership article by Italian PrimeGlobal member firm Studio Ferrari & associati which provides details on further changes to the inpatient regime in Italy. 

The special regime for impatriated workers was introduced for the first time with article 16 of Legislative Decree 147/2015. Subsequently, the measure underwent changes, the last of which through the Budget Law 2021, which extended the period of use of the facility for another five years under certain conditions.

However, to clarify what the inpatient regime offers today, it is good to analyze what it is about.

The special regime for expatriate workers, introduced by the Legislator, is a norm intended to attract new human resources in Italy.

Specifically, it is a tax relief provision to facilitate the transfer to Italy of individuals who produce income abroad, of workers who start a work activity carried out mainly in the territory of the State.

The law guarantees impatriated workers (the characteristics of which are described below) a regime through which income from employment, income similar to employment, income from self-employment and also commercial income produced in Italy contribute to the formation of total income within the limit of 30% of the amount for five years.

In the event that the requirements to renew the option exist , the aforementioned income participates in the formation of the tax base within the limit of 50% of its amount. These limits are further reduced, up to 10% of the indicated income, when the impatriated worker has three minor dependent children, or if he moves to one of the southern regions (Abruzzo, Basilicata, Calabria, Campania, Molise, Puglia, Sardinia, Sicily).

Access to this tax benefit is, as mentioned, reserved to the subjects defined in the law as impatriated workers. Specifically, it refers to the following group of subjects:

  • workers who transfer their residence to Italy, after having resided abroad at least in the last two tax periods and who undertake to maintain their residence in the territory of the State during the two following tax periods, carrying out a work activity mainly in Italy ;
  • EU citizens who have resided for at least 24 months in Italy and who, although they now reside in their country of origin, have continuously carried out a study activity outside that country and Italy in the last 24 months or more, obtaining a postgraduate degree or specialization, who are hired or establish a commercial or autonomous activity in Italy and transfer their domicile, as well as their residence, to Italy within three months after the recruitment or start of commercial activity;
  • Citizens of non-EU countries with which an agreement against double taxation with Italy is in force, who are in possession of a university degree and have carried out, continuously in the last two years, a study activity that has led them to the achievement of a Bachelor's or postgraduate specialization.

Italian citizens who are not registered in the Register of Italians Residing Abroad (AIRE), and who have returned to Italy, can also access the scheme, provided that they have resided in a state in which an agreement is in force against double taxation. 

Having made this clarification about the subjective requirements to access the regime, it seems appropriate to outline the duration of the regime equal to five years. This period can be extended for another five years (with simultaneous reduction of the benefit, increasing the competition from the aforementioned income to the tax base, from 30% to 50%) if the applicant has a minor dependent child, or if he buys a property residential in the territory of the Italian State (even if the purchase is made by the spouse or a child).

The above constitutes the tax benefit for expatriate workers who transfer their tax residence as of 2020.

Special mention for professional athletes, whose income is always tax-free up to 50% and provided that they pay a contribution equivalent to 0.5% of the tax base, intended to strengthen the youth sectors.

The new changes with the Budget Law 202:

It is established that citizens registered in the Register of Italians residing abroad or EU citizens can benefit from a 50% reduction in the tax base for another five years provided that:

  • They will move to Italy before the January 1, 2020 ;
  • As of December 31, 2019, they are already beneficiaries of the inpatient scheme,
  • exercise the option of wanting to rejoin the benefits;
  • pay an amount equal to 10% of the income from employment and self-employment produced in Italy in relation to the tax period prior to the exercise of the option, in case the subject has at least one minor child, even if this in the adoption phase, and you become or have become the owner of at least one residential real estate unit in Italy, after the transfer to Italy or in the twelve months prior to the transfer, or you become the owner within the eighteen months from the date of exercise of the option;
  • pay an amount equal to 5% of the income from employment and self-employment produced in Italy in relation to the tax period prior to the exercise of the option, in the event that the subject has at least three minor children, even if is in the adoption phase, and you become or have become the owner of at least one residential real estate unit in Italy, after the transfer to Italy or in the twelve months prior to the transfer, or you become the owner within eighteen months from the option exercise date

The new measure does not apply to professional athletes.


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Ferrari & Associati – Studio Legale e Commerciale

Ferrari & Associati is the complete solution for individuals, partnerships, and corporations. The firm was established in 2001, as a result of the transformation of the Accounting firm founded in 1965 by Dr. Nazzareno Ferrari. We are based in Rome, Italy. We provide highly qualified legal and commercial assistance to our clients, offering a full range of services in the areas of accounting and auditing, taxation, financial, and advisory services. Our work focuses on the creation of assets and trusts, personal planning, corporate reconstructing operations, banking and insurance, development of entrepreneurial projects, and much more.

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