Any employment or similar income and self-employment income, up to EUR 600,000 at most, generated in
Italy is deemed to contribute to their overall income only up to 50% (Article 5, Legislative Decree 209/2023).
This percentage is reduced to 40% (which means that they are entitled to a 60% exemption) if, during the period of use of the tax relief scheme, the worker finds him or herself in one of the following situations:
- Moves to Italy with a child who is a minor;
- Birth to a child or adoption of a minor. In this case, the relief applies to the tax year when the birth or adoption occurred, for the residual period of eligibility.
The increased exemption applies on condition that the child is resident in Italy.
Subjective requirements for obtaining the tax relief
In order to obtain the tax relief (pursuant to art. 5 of Italian Legislative Decree 209/2023), applicants must:
- have been working abroad;
- not have been resident in Italy in the THREE tax years preceding their transfer to Italy;
- become resident in Italy for tax purposes and undertake to remain so for at least FOUR years, under penalty of having to pay back the benefits claimed plus interest;
- carry out work on Italian territory for the majority of the tax year;
- meet the high qualification or specialisation requirements defined by Italian Legislative Decrees No. 108/2012 and 206/2007.
Duration of the tax relief
The tax relief is applicable for 5 years overall, which shall run from the year in which the worker becomes resident for tax purposes in Italy and for 4 years thereafter.
If the tax residence in Italy is not maintained for at least four years, the worker forfeits the benefits and any amounts claimed will have to be paid back with interest.
Extension of the tax relief
Solely for those who have transferred their permanent residence in the year 2024, the benefit applies for further 3 tax years if one of the following conditions applies:
- By 31/12/2023, the person has become the owner of a residential property unit used as their main home in Italy;
- Within 12 months before moving Italy, the person has become the owner of a residential property unit used as their main home in Italy.
For this period, the subsidised income will be equal to 50% of the total employment or similar income and self-employment income.
How to apply for the tax relief
Employees who believe they are entitled to this tax relief must submit the relative application form available on the intranet, to which they will have access once they acquire their university credentials.
The University, in its capacity as withholding agent, following a positive outcome of the request, applies the tax benefit from the first applicable period of pay and, when making the necessary adjustments, applies the benefit from the beginning of the period.
The application for tax relief must be submitted to the employer also in the event of the worker being hired again for a job other than that for which they initially returned.
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.