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Legislative Decree No. 209 of 27 December 2023 introduces a new preferential scheme from FY 2024 for returning workers aimed at encouraging the relocation of qualified or specialized professionals to Italy. The primary objective of this regulation is to incentivize the transfer of tax residency to Italy by offering significant tax benefits to those who choose to work in the country. Below is a detailed analysis of the provisions contained in Article 5 of the decree.

Scope of Application

The scheme applies to employees, quasi-employees, and self-employed individuals who transfer their tax residency to Italy starting from the 2024 tax year. These workers benefit from a preferential regime that taxes only 50% of the income earned in Italy, up to an annual limit of €600,000, provided specific conditions are met.

Eligibility Conditions

To qualify for the tax benefit, the following requirements must be fulfilled:

Commitment to Maintain Tax Residency in Italy for at Least Four Years

The worker must ensure tax residency in Italy for a minimum of four years.

No Tax Residency in Italy in the Previous Three Years

The benefits are available to individuals who were not tax residents in Italy during the three tax years preceding the transfer.

Exceptions for Workers Returning Within the Same Corporate Group

• A minimum of six years abroad is required if there were no prior roles in Italy with the same employer.
• A minimum of seven years abroad is required if the worker was previously employed in Italy by the same entity or group.

Predominant Exercise of Work Activity in Italy

The activity must be carried out predominantly in the Italian territory during the tax year.

High Qualification or Specialization

Workers must possess skills that align with the criteria outlined in Legislative Decrees 108/2012 and 206/2007, which regulate the requirements for highly qualified jobs and the recognition of professional qualifications, respectively.

Duration of the Benefit

The preferential scheme applies for a period of five years starting from the tax year of relocation. However, if the worker fails to maintain tax residency in Italy for at least four years, the benefit is forfeited, and the untaxed amounts are reclaimed, along with accrued interest.

Additional Benefits for Families with Children

The decree introduces further incentives for workers relocating with a minor child or adopting one during the preferential period. In such cases:

• The taxable income percentage is reduced from 50% to 40%.
• This condition applies throughout the benefit period, provided the child is also a tax resident in Italy.

Extension for Homeowners in Italy

A special provision applies to workers who purchase a primary residence in Italy by 31 December 2023. For these individuals, the tax benefit is extended by an additional three years, bringing the total benefit period to eight years.

Obligations and Forfeiture

To retain the right to the preferential regime, individuals must:

• Comply with the eligibility requirements throughout the benefit period.
• Maintain tax residency in Italy for at least four years.

Non-compliance results in the loss of the benefit and the recovery of untaxed amounts, including accrued interest.

Repeals and Updates

With the introduction of this scheme, the provisions previously contained in Article 16 of Legislative Decree 147/2015 and Article 5 of Decree-Law 34/2019 are repealed, except for those who transferred their official residency to Italy by 31 December 2023.

Compliance with European Law

The new regulation is subject to the limitations imposed by EU regulations on de minimis aid, ensuring compliance with Union law.

Conclusions

The new regime represents a unique opportunity to attract talent and highly qualified resources to Italy, contributing to the country’s economic and cultural development. The tax incentives, structured over a medium-to-long term period, aim to ensure stability and encourage workers to establish roots in Italy. This decree marks a significant step forward in international taxation and support for skilled workers, addressing the needs of an increasingly global market.