Tax opportunities in Italy for digital nomads and remote workers

The introduction of the new visa for remote workers in Italy extended the possibility of benefiting from the Inpatriates special regime for qualified workers from outside Italy who decide to spend a period in Italy. 

The introduction of the new visa for remote workers opens a window of opportunity for remote workers and digital nomads. The recent amendment of the special immigration rules and the advantageous regime for inpatriates may attract qualified workers (employees, in the case of remote workers, or self-employed, in the case of digital nomads) from outside the EU who are willing to spend a period of time working in Italy. 

The Ministerial Decree on digital nomads (Ministerial Decree of 29 February 2024) introduced an exception to the strict rules on immigration in Italy, permitting non-EU  workers meeting certain conditions to move to Italy. 

In particular, the entry and stay of digital nomads/remote workers is allowed for workers who have a minimum annual income of no less than three times the minimum level for exemption from participation in healthcare costs (currently the minimum annual income threshold is approximately €28,000 per year). The digital nomad/remote worker must be in possession of health insurance for medical treatment and hospitalisation valid for the national territory and for the entire period of the stay.  

The individual must also be able to prove, with documents or otherwise, where they plan to stay in Italy.  They must also have at least six months’ work experience as a digital nomad or remote worker. 

The introduction of this provision is of particular interest when analysing the recently amended ‘inpatriates’ special tax regime. In fact, the immigration novelty can be combined with the new formulation of the inpatriate regime introduced by Legislative Decree 209/2023. 

The new rules which came into force on 1 January 2024 provide that 50% of the person’s income applied to a maximum of annual income of €600,000 from employment and self-employment arising from the exercise of arts and professions of workers who transfer their residence to Italy pursuant to Article 2 of the Italian Tax Code (Presidential Decree no. 917/1986) will not be taxable subject to the following conditions: 

• The individual undertakes to reside in Italy for tax purposes for a period of at least 4 years (the favourable tax regime will last for the year of entry and the subsequent four years); 

• The individual has not been resident in Italy for tax purposes in the 3 tax periods preceding their transfer (the foreign residence period is extended to 6 tax periods if the individual has not previously been employed in Italy by the same entity or by an entity belonging to the same group or to 7 tax periods if the individual, prior to his transfer abroad, was employed in Italy by the same entity or by an entity belonging to the same group); 

• The work is performed for most of the tax period in Italy; 

• The individuals are highly qualified and specialised. 

If the individual moves to Italy with a minor child or if a child is born or a minor child is adopted during the period in which they benefit from the special regime, the 60% of their income will not be taxable. If the birth or adoption takes place during the period in which the individual benefit from the special regime, the additional benefit will start from the tax period in progress at the time of the birth or adoption. 

The tax incentive applies starting from the tax period in which the transfer of tax residence to Italy took place and for the following four tax periods. 

According to article 2 of the Income Tax Act (i.e. TUIR), an individual is considered an Italian tax resident if one of the alternative criteria (physical presence within the Italian territory, domicile in Italy, residency in Italy as defined by article 43 of the Italian Civil Code and registration in the Record of Italian resident Population) is met for the greater part of a tax period (i.e. for at least 183 days during the calendar year, or 184 days during a leap year). 

It should be noted that the Italian legislation does not provide a split residence regime in a single tax period (calendar year). Generally, and subject to any double tax treaty terms, if an individual moves to Italy before the end of June, they will be considered tax resident in Italy for the entire tax period (calendar year). On the contrary, if an individual transfers his residence to Italy after the end of June, they will be considered tax resident in Italy starting from 1 January of the following tax period. 

However, should the non-EU worker wish to benefit from both disciplines (inpatriate regime and visa for digital nomads or remote workers), some considerations are necessary: 

• As much as the definition of ‘digital nomad’ may lead back to a temporary transfer of residence, it is necessary to specify that in order to benefit from the inpatriate regime the residence must be maintained in Italy for at least four years. In addition, it is necessary that the work activity be carried out mainly in Italy. 

• In addition, the residence permit ruled by the Ministerial Decree of 29 February 2024 is valid for one year. However, it must be clarified that it will be renewable, for the same period, if the requirements that allowed it to be issued for the first time are met. 

• The above information is for awareness purposes only.  You should always take further advice on how your specific circumstances will be treated in your existing jurisdiction of residence and in Italy.