Inbound employees tax regime applicable also to persons not registered on AIRE

Italian tax authorities have always considered that the lack of Registration on the Register of Italians living abroad (AIRE) was a sufficient requirement to consider a person as a resident in Italy by default.

This presumption had the consequence, among others, of not being able to benefit of the Inbound employees’ tax regime.

This approach has always been in contrast with the conventional provisions (that prevail over the internal regulations), which, if drafted according to the OECD model, provide that the residence conflict must be resolved considering as prevalent the place of permanent residence or of vital interests (personal and economic relations) on the formal requirement (in this case, registration with AIRE).

Italian tax authorities, answering to the question nos. 204 of June 25, 2019, seem to change their opinion by considering the OECD model provisions prevalent on internal ones.

Article. 5, paragraph 5 of law n. 34/2019 provides, in general, that the inbound employees tax regime, as amended, is applicable to persons who get the fiscal residence in Italy from the fiscal year 2020.

The tax authorities clarify that the provisions of the inbound employees’ regime tend to identify the residence abroad also according to OECD models.

In this case, an Italian citizen resident in London since 2016 has been included on AIRE register since 2017 and relocated his residence in Italy in 2019. According to the Italian tax authorities if this person, that has not been registered on AIRE on 2016, is able to prove his residence abroad since 2016 pursuant to the provisions OECD models between Italy and the United Kingdom – without prejudice to the other requirements – can benefit of the inbound employees’ regime.