News Flash No. 35/2024
The Internal Revenue Service with its own News explained the effects of the changes introduced by the International Taxation Decree (Legislative Decree No. 209/2023) on the tax residence of individuals, companies and entities, effective as of 2024. Residents of Italy are natural persons who for most of the year have their domicile in the territory of the State, developing personal and family relations primarily in our country. Thus, the concept of "domicile" changes: unlike the previous regulation, it is no longer borrowed from the Civil Code but, in line with international practice, prevalence is given to personal and family relationships rather than economic ones. It is in any case without prejudice to the possible application of provisions contained in double taxation conventions. The practice paper also illustrates the new rules with concrete examples.
A new "residence" for individuals
As a result of the regulatory changes, mere presence in the territory of the state for most of the tax period - 183 days in a year or 184 days in the case of a leap year, including fractions of a day - is sufficient to set up tax residence in Italy. The circular makes clarifications on the computation of fractions of a day. It also illustrates that as a result of the introduction of the new criterion of physical presence, persons working in smart working in the Italian state, for most of the tax period, are considered to be tax resident in Italy, without the need to configure any of the other connecting criteria provided for in the regulations (civil residence, domicile, civil registration). Finally, as a result of the changes introduced, registration in the registry of the resident population acquires the value of a relative (and no longer absolute) presumption of tax residence in Italy: it is valid, therefore, unless proof to the contrary can be provided by the taxpayer. Finally, the criterion of residence under the Civil Code remains firm, as does the principle of the alternation of the different criteria.
Corporations and entities, new criteria for residency