Italy

Quick Facts

• Tax residency threshold: More than 183 days in the calendar year (including fractions), OR habitual abode in Italy, OR domicile in Italy, OR registration on the municipal resident register (anagrafe)
• What counts as "day": Any day (or part of a day) in Italy counts, including arrival/departure days
• Alternative triggers: Habitual abode (main home), domicile (personal/family ties), or municipal registration can trigger residency even with fewer than 183 days
• Consequence: Residents taxed on worldwide income; nonresidents taxed only on Italian-source income
• Key relief: Italy offers flat-tax regimes for new residents on foreign income (currently €100,000/year substitute tax; changing to €200,000 from 2025)

Residency Rules Explained

Visa vs Tax Residency

Key Dates

• Tax year: Calendar year (1 January – 31 December)
• Residency period: Once you meet any test, you're typically resident for the full year ("all in, all out")
• Effective date: Residency generally applies from the first day you satisfy a criterion (when 184th day occurs, or when abode/registration established)
• Filing deadline: Annual tax returns due by specified deadline (varies; typically June with extensions available)

Common Pitfalls

• Assuming staying under 183 days avoids residency — habitual abode, family ties, or municipal registration may override
• Underestimating the significance of municipal registration (anagrafe) — this creates a strong presumption
• Not understanding the burden of proof — YOU must demonstrate stronger ties elsewhere to rebut presumed residency
• Overlooking new physical presence rule clarifications in recent reforms
• Missing eligibility for flat-tax/new resident regimes (conditions and caps apply)
• Failing to plan the "all in, all out" rule — crossing 183 days means full-year tax resident status

Before You Reach 183 Days

• Track entry/exit dates with DayVA if approaching the 183-day threshold
• Understand that municipal registration (anagrafe) triggers a presumption of residency
• Research whether you qualify for Italy's flat-tax regime on foreign income (must meet eligibility criteria)
• Document your ties outside Italy if you want to avoid residency (employment, property, family location)
• Plan municipal registration carefully — registering in anagrafe creates tax residency presumption
• Understand the "all in, all out" rule — once you cross 183 days, you're resident for the full year

Offshore & Expat Considerations

• Flat-Tax Regime for New Residents: Individuals relocating to Italy who were not Italian tax residents in 9 of the prior 10 years can opt for a substitute tax on foreign income. Currently €100,000/year; from 2025, expected to increase to €200,000/year. This is one of Europe's most favorable immigration tax regimes but conditions apply
• Worldwide Income and Wealth Tax: Residents must declare all global income and foreign assets. Subject to:
• - IVIE (wealth tax on foreign real estate)
• - IVAFE (wealth tax on foreign financial assets)
• Non-Resident Taxation: If nonresident, taxed only on Italian-source income (employment, real estate rentals, business in Italy)
• Double Taxation Treaties: Italy has extensive treaties. If another country also claims you as resident, tie-breaker rules (permanent home, center of vital interests, habitual abode, nationality) determine treaty residence
• Municipal Registration Impact: Registering in anagrafe has tax consequences beyond residency — affects property taxes, healthcare access, voting rights. Plan carefully
• Habitual Abode Determination: The concept is subjective. Factors include: where your family lives, where you work, where you own/rent property, where you spend most time, your intentions. Gather documentation to support your position