The law (art. 44 of Decree Law 78/2010, concerning the so-called "brain gain") provides that 90% of the income received by teachers and researchers that transfer their tax residence to Italy is excluded from personal income tax (IRPEF).
This relief applies exclusively to income deriving from teaching and research activities. Therefore, where employees of the University are under agreement with agencies of the regional health system (SSR), said relief is not applied to clinical emoluments.
Said provision concerns all Italian and non-Italian teachers and researchers who intend to move to Italy to promote the development of research in our country.
Requirements for obtaining the tax relief
1. Possession of a university degree or equivalent qualification
University degrees obtained abroad are not automatically recognised in Italy. Therefore, the interested party must request the "declaration of value" from the competent consular authority (Italian diplomatic representation abroad: embassy or consulate), which must be drafted in Italian.
2. Applicants must have been resident abroad on a non-occasional basis
Applicants must have been permanently established for a period of at least two years calculated based on the common calendar and not on the periods of tax residence. For teachers, however, this may be calculated based on the duration of the academic years.
3. Applicants must have performed documented teaching or research activities for at least two consecutive years at public, private or university research centres.
The term 'research organisation' is understood as referring to entities such as universities, research institutes, technology transfer agencies, innovation intermediaries, real and virtual collaborative research entities, regardless of their legal status (incorporated under private or public law) and of their source of funding, the main goal of which is to conduct independent research. Entities that carry out economic activities may also be considered research centres provided that said activities are accounted for separately from the research activities.
For this purpose, the relative documentation must be issued by the same research centres or universities where the activities are conducted that attests to:
- the nature of the entity;
- the activity carried out;
- the duration of the activity conducted without interruption for at least 2 years, even if not immediately preceding the applicant's return to Italy (for teachers, the period of twenty-four consecutive months is deemed as completed if the activity was performed for two consecutive academic years).
Said documentation must be issued in Italian. If, instead, it is issued in English, French, German or Spanish, it must be translated into Italian. The translation may be completed by the taxpayer in question. If, however, the documents are issued in other languages, a sworn translation will be necessary, or the translation will have to be endorsed by the consular authorities.
4. Perform teaching and research activities in Italy
There is no provision in the law regarding the requirements of employers and clients, who must nonetheless put in place organisational structures for the purposes of conducting research and/or teaching and/or training activities.
5. Obtain tax residency in the territory of the State
Tax residency in the country must be obtained consequent to performing work activities in Italy. The benefit can be obtained by those who transfer their residency to Italy prior to starting work provided there is an apparent connection between the two events.
The connection required by the law between the return to Italy and performing the activity eligible for tax relief may be deemed to exist both where the teacher or researcher has started the activity in Italy prior to transferring their residency and where they have transferred their residency to Italy prior to starting the activity.
Duration of the tax relief
The tax relief is applicable from the year in which the teacher/researcher becomes resident for tax purposes in Italy and for the successive tax years, provided that they remain resident for tax purposes in Italy.
The tax relief is applicable for 6 years which shall run from the year in which the teacher/researcher becomes resident for tax purposes in Italy and for 5 years thereafter, provided that they remain resident for tax purposes in Italy.
Extension of the tax relief
If the applicant meets further requirements and provided that they remain resident for tax purposes in Italy for the entire period, the tax relief is applicable for:
- 8 tax years overall
- if the applicant has a minor or dependent child, including if in pre-adoptive care;
- if the applicant acquires full ownership of at least one residential real estate property in Italy following their transfer to Italy or in the twelve months prior to the transfer (the real estate property may be purchased directly by the interested party or by their spouse, partner or children, also in co-ownership);
- 11 tax years overall, if the applicant has at least two minor or dependent children, including if in pre-adoptive care;
- 13 tax years overall, if the applicant has at least three minor or dependent children, including if in pre-adoptive care.
Register of Italians Resident Abroad (A.I.R.E.)
Italian teachers and researchers may be entitled to tax relief even if they were not on the A.I.R.E. for the period in which they lived abroad provided they were resident in another country subject to a double taxation agreement for the 2 tax years prior to the transfer of their tax residency to Italy.
How to apply for the tax relief
Employees who believe they are entitled to this tax relief must send the Tax relief application form [.pdf 425 KB] to arag.stipdoc@unibo.it.
The application for tax relief must be submitted to the employer also in the event that the worker is hired again for a job other than that for which they initially returned.
The University, in its capacity as a tax withholding agent, at the documented request of the employee, applies the tax relief from the first effective pay packet, following assessment and, on determining the final balance, from the date on which the right accrues, by applying withholding tax to the employee's taxable income, reduced as provided for by the relief tax regime, with the relative deductions commensurate with this reduced sum. If the employer is unable to apply the tax relief, the taxpayer may, if the legal requirements are met, claim it directly through their tax return. In this case, the reduced amount of the income from employment must be indicated.
How to apply for an extension of the tax relief
If, following submission of the application for tax relief, the applicant meets the requirements for extension of the same, the employee in question must send the Tax relief extension application form [.pdf 163 KB] to arag.stipdoc@unibo.it.
Responsibility vis-a-vis the Italian Revenue Agency
The employee is directly responsible vis-a-vis the Italian Revenue Agency with regard to the tax relief obtained from their employer. The Italian Revenue Agency may perform audits in subsequent years requesting the employee directly to produce the documentation submitted to the employer in order to obtain the tax relief, focusing in particular on their previous residence abroad. Employees are therefore reminded of the importance of keeping all the original documents attesting to their entitlement in accordance with the law.
More information
For further information on the tax relief, please consult the Italian Revenue Agency circular no. 17/E of 23/05/2017.