Decreto n. 209/2023, in force since 1st January 2024, has significantly changed the rules on residence and domicile in Italy for tax purposes, both for individuals and companies.
Individuals will now be considered resident in Italy for tax purposes if for the majority of the given year (183 days in the period from from 1st January to 31st December, or 184 days in a leap year) both their “residence” and/or their “domicile” was in Italy.
The tax residence test no longer follows the concept of “domicile” in the Civil Code, defined in article 43 as the place in which a person has established the main centre of interests. In the new rules the test of domicile has been redefined for tax purposes to be primarily the “centre of an individual’s personal relationships and family interests” in relation to which their economic interests are considered a secondary factor. This new rule of domicile is now more closely aligned with international rules and practice on establishing tax residence.
The test of “residence” remains that as defined by the Civil code by which a persons residence is the usual place of abode in which they live continuously (“dimora abituale”).
Residence at the Anagrafe is no longer the absolute rule on establishing tax residence, but could establish a “presumption” in favour of tax residence in addition to meeting the test of residence and/or domicile as defined by the new rules.
These new rules imply that even a person who works remotely in Italy for an overseas company, if present in Italy for at least 183 days will be considered tax resident.
By way of example, a person who is formally resident overseas, but who spends at least 183 days in Italy and has their main place of abode here (ie resident according to the definition in the Civil Code), even where not registered at the Anagrafe, could be considered tax resident in Italy.
A company will be considered tax resident in Italy if for the majority of the year either a) their registered office or b) the main administration office or c) the principal place of business.
A circular was published by the Agenzia delle Entrate on 4th November 2024 containing operating instructions in relation to the new rules – circolare n. 20 de 4 novembre 2024 residenza pdf.