Inland Revenue: option to extend repatriated workers tax regime

In its answer to question no. 383 of 18 July 2022, the Inland Revenue clarified the option to extend the regime provided by the “Decreto Crescita” for repatriated workers.

Regulatory references

Article 5, paragraph 2-bis of Decree Law no. 34/2019, the Decreto Crescita, by amending Art. 16 of Italian Legislative Decree no. 147/2015, stated that the provisions of the special tax regime for “repatriated” workers “are applicable for a further five tax periods to workers with at least one minor or dependent child, including in pre-adoptive foster care” or if “workers become owners of at least one residential property unit in Italy, after the transfer to Italy or in the 12 months before the transfer.”

The benefit applies to those who had transferred their residence before 2020 (the regulatory provision starting date) and who, as of 31 December 2019, benefited from the repatriated workers tax regime under Article 16 above. This is subject to the payment of 10 per cent (or five per cent in some instances) of the taxable employment and self-employment income produced in Italy and relating to the tax period before the option was exercised.

The payment methods and deadlines were established by the Inland Revenue with order no. 60353 of 3 March 2021, by which the amounts must be paid, in a single instalment, using the F24 payment form by 30 June following the last year of the first five-year benefit period.

The facts

The applicant,  had already transferred residence to Italy before 2020, and notified the Inland Revenue of:

• the possibility to benefit from the extension of the regime for repatriated workers, under the Decreto Crescita;
• his payment for the amount due for the favourable regime by using the F24 Elide on 26 August 2021, which used the “social security and welfare data” Unified Certification section as the income parameter for the tax calculation;
• after an audit carried out with the assistance of the withholding agent, it was found that the amount calculated and paid was less than the amount due.

The applicant requested to use the voluntary settlement to pay the additional amounts due late and benefit from the five-year extension of the repatriated workers regime.

Inland Revenue conclusions

The Inland Revenue, based on the clarifications provided in Circular no. 33/E of 28 December 2020, stated that (i) the option is subject to the payment within the deadline under the Agency Director’s Order (Ref. no. 60353/2021) and (ii) those (as in this case)for whom the first period to use the benefit ended on 31 December 2020, the payment had to be made within 180 days.

The tax authority stated that – if the payment of the amounts due was omitted or deficient, the benefit could not be applied. A voluntary settlement was not allowed for this case.

The Agency said that the applicant could not benefit from the favourable repatriated workers regime for additional five tax periods because of the incorrect payment but may recover the sums paid under Art. 21 of Legislative Decree 546/1992.