Non resident individuals moving to Italy and spending substantial time there for work or other reasons may become subject to Italian tax obligations.

If they do not satisfy the tests to become resident in Italy for tax purposes, they would be subject to tax in Italy exclusively on their Italian source income earned while physically present in Italy or otherwise arising from  their Italian services or activities.

Tax treaties may provide relief from tax on business or professional income from Italian sources, if they did not have a fixed base or establishment in Italy to which such income would be effectively connected. In this case, they should seek relief for Italian tax under the exemption or tax credit regime of their home country of residence.      

Nonresident individuals who satisfy the residency tests would become subject to tax in Italy on their worldwide income; that may overlap with taxation of the same income in their home country of origin and end up in double taxation.

Tax treaties contain specific provisions that assign tax residency to one of the two contracting states when a taxpayer is treated as resident of both contracting states under the internal rules of each of those states.   

We assist clients in plan their move to Italy or outside their country of origin in advance in order to avoid double taxation issues; to resolve double residency issues under tax treaties and to eliminate double taxation through foreign tax credit or exemption relief. 

Our services in this area include:

- advice of tax residency issues arising under under Italian law and the tie breaker rules of Italian tax treaties;

- advice on fixed base or permanent establishment issues and the application of Italian tax on income from Italian activities;

- advice on possible relief from Italian tax under Italian tax treaties;

- assistance in preparing and filing Italian tax returns and complying with other reporting requirements as provided for under Italian law.