Summary of the Italian “return of the Brains” Tax Regime (as of Legislative Decree 209/2023)
This document outlines the tax benefits available to individuals (“impatriated workers”) who return to live and work in Italy, having previously resided abroad. Here’s a breakdown of the key requirements and benefits:
1. Eligibility Requirements (Residency):
Prior Residency Abroad: Must have been a resident abroad for at least three years before transferring tax residency to Italy.
Employment History Impacts Residency Requirement:
6 years if previously working abroad for the same company or a company within the same group.
7 years if previously working in Italy for the same company or a company within the same group.
Minimum Residency in italy: Must commit to residing in Italy for at least four years. Work Location: Work activity must be carried out mainly in Italy. AIRE Registration: Ideally, must be registered in AIRE (Registry of Italians Residing Abroad). Though, access is also possible for those not registered, provided they have established tax residency in a country with a double taxation agreement with italy.
2. Eligibility Requirements (Qualification):
High Qualification or Specialization: Applicants must possess either:
Higher Education Title: A university degree (at least a three-year course) issued by a competent authority in the country where it was obtained,demonstrating a higher professional qualification.
Professional Experience: At least five years of relevant professional experience in the field, as demonstrated by the employment contract or binding offer.
Specific Professions: professionals (pharmacists, architects, veterinarians, dentists, surgeons, etc.) who meet the requirements to practice their profession are eligible.
3. Tax Benefits:
IRPEF deduction: A deduction from IRPEF (Italian income tax) of 50%.
Increased deduction with Children: The deduction increases to 60% if the applicant has minor children.
Income Cap: The benefit applies to income up to a maximum of €600,000 per year.
4. Sports Professionals:
Considered “workers” and can benefit from the regime if they meet the general requirements (residency and qualification).
Classified as technical professionals by ISTAT.
In essence, the regime aims to incentivize highly skilled professionals to return to Italy by considerably reducing their income tax burden. The recent changes (Legislative Decree 209/2023) have increased the required period of prior residency abroad, making the requirements more stringent.
