PSC

Your Business in Europe


Information and assistance for businesses established in Italy that wish to operate outside national borders or purchase services from a provider located in another European Union Member State.

FIND OUT MORE

Doing business in Italy (PSC Italy)


Information and assistance for businesses established in other European Member States that wish to provide services in Italy on a permanent or temporary basis.

FIND OUT MORE

News - Europa

TELE WORKING FOR NON-ITALIAN COMPANIES: TAXATION GUIDELINES

The Italian Revenue Agency's Circular 25/2023 provides detailed guidance on the taxation of employees operating from home, under the titleTax Profiles of Remote Work (commonly referred to as smart working) and the Legal Framework for Taxation of Frontier Workers.' Innovations introduced by Law No. 83 of 13 June 2023'".

The tax residency criteria for natural persons are still the ones laid down in Article 2 of the TUIR (Income Tax Consolidation Act) as approved by Presidential Decree 22 December 1986, No. 917) and do not change for people engaged in smart working..

Natural persons are considered resident in Italy if, for the majority of the tax period (183 days in a year, or 184 days in a leap year), they alternatively meet one of the following conditions:

 

  • they are registered in the resident population registry;
  • they have their domicile in the territory of the Italian State, understood as their primary place of business, economic interests, and personal relationships, inferred from circumstantial evidence;
  • they have their habitual residence in the territory of the Italian State.

According to Article 15, paragraph 1 of the OECD Model, which is largely reflected in Italy's DTA agreements, employment income is subject to exclusive taxation in the taxpayer's country of residence.

See Circular 25/2023.