By Ruling no. 524 of October 25, 2022, the Italian Revenue Agency affirmed that the “special tax regime for inbound workers” introduced by Article 16 of Legislative Decree No. 147 of September 14, 2015, also applies to the CEO of an English holding company who intends to transfer his tax residence to Italy to (a) to assume the role of director of an Italian company within the same group, and (b) develop the business of the same company in the Italian territory.

Article 16 of Legislative Decree No. 147/2015 paragraph 1 states that the special tax regime (which entails a 70% exemption of taxable income, subject to exceptions) is available to workers who transfer their residence to Italy and who meet all the following conditions:

  • they must not have been tax residents in Italy during the two fiscal years preceding the abovementioned transfer; and
  • they undertake to reside for tax purposes in Italy for at least two years; and
  • the activity must be carried out mainly in the Italian territory.

Such regime is available to taxpayers for five years starting from the fiscal year in which they transfer their tax residence to Italy, pursuant to Article 2 of the TUIR, and for the following four fiscal years, subject to extension for five additional years.

Official clarifications on the subjective and objective conditions requested to access the special tax regime were provided by Circular No. 33/E of December 28, 2020, where, among other things, it was underlined that the inbound expatriate workers regime does not require that the activity be carried out for a business operating in the territory of the State. In addition, Ruling No. 72/E of September 26, 2018, referred to in this Agency's reply, clarified that: “the autonomy of contractual relations within a corporate group having different companies located and operating in different States does not exclude, upon the occurrence of all the other conditions required by the rule in question, the possibility to access the special tax regime for inbound workers, with no relevance to the circumstance that the work activity has been carried out with companies belonging to the same group.”

In his request for Ruling, the applicant sustained the abovementioned regime would be applicable – from fiscal year 2023 (i.e., the fiscal year of transfer of his residence for tax purposes in Italy) – notwithstanding:

  • he would maintain the role of CEO of the English company, which has not an employment relationship nature; and
  • in the past years, he was – at the same time – director of the Italian company as ancillary activity to that of CEO of the English company.

The Revenue Agency adhered to the interpretation of the applicant. In conclusion, it has considered that the special tax regime for inbound workers applicable also in the case at hand, is not precluded by the circumstances that (a) the applicant will retain the role of CEO with the English company, and that (b) he previously held the position of director of the Italian company prior to the transfer to Italy.

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