Permanent residence
Article 43, paragraph 2 of the Italian Civil Code defines the permanent residence as the “place where a person has their habitual abode”. A person’s permanent residence is in the municipality in which they are listed in the resident population register.
Usually, the residence and abode of a natural person coincide.
According to Article 43, paragraph 1 of the Italian Civil Code, the domicile is the place where a person has established and intends to maintain his or her principal centre of business and social interests.
Important note
Regarding permanent residence, it should be noted that the 2024 Budget Law (Italian Law 213/2023) has established that, in the event of failing to comply with the obligation to communicate the transfer of permanent residence either from or to a foreign country pursuant to current legislation, an administrative fine shall apply, ranging from EUR 200 to EUR 1,000 for each year in which the failure to comply continues.
For more information, see the Italian Revenue Agency circular no. 20 dated 4 November 2024 (in italian only).
Tax residence
As of 1 January 2024, for income tax purposes (art. 2, paragraph 2, of Italian Presidential Decree 917/86), an employee is considered resident in Italy for tax purposes if, for the majority of the year (a period of at least 183 days in the calendar year, or 184 in a leap year, even if not continuous, considering fractions of a day as a full day), one of the following conditions apply:
- Their residence is in Italy pursuant to Article 43, paragraph 2 of the Italian Civil Code (understood as their place of habitual abode, which translates into their physical permanence in a certain place);
- They are domiciled in Italy, understood as the place where the person’s personal and family relations are primarily conducted;
- They are present physically on Italian soil (habitual residence);
- They are listed in the Resident Population Register (APR).
It should be underlined that, in order to have tax residence in Italy, only one of the above needs to apply.
Unless proven otherwise, Italian citizens who have been removed from the resident population register and transferred to countries or territories with a preferential tax regime, as identified by Decree of the Ministry of Finance (Article 2, paragraph 2-bis, Italian Presidential Decree 917/86), are considered to be resident in Italy for tax purposes.