Lots of changes on immigration, permessi etc

First topic message reminder :

I have just noticed that all of the rules for entering, visiting and staying in Italy have changed. I have posted the new rules in Italian under residency and will slowly translate them. I've started but there are a LOT!

It looks like Italy has finally decided to comply properly with the EU rules whilst implementing some new ones.

I agree Admin, but at the end of the day the Entrate would be in the wrong and they cannot get away with it in a court of law. Whether people are prepared to go that far I'm not too sure, but I'm certainly one of the "anally retentive amongst you" and at times very happy to take on things I see as wrong.  Also we have two very different circumstances involved here, people who are still working and those that are not. Your involvement with the tax authorities is quite likely down to you trying to do things the right way here in Italy and in association with your working here. Many others have no intention of working here and are basically on a 20-30 year holiday... ! If they want to keep their heads down and hope they will not be targeted, good luck to them. It could well be Marche is a region where the authorities (I don't know if they break down to regions etc, but suspect they will) are purposely looking at these type of people, perhaps because they have a register of some kind or are just keen to improve their revenue. I have no doubt things will change and in fact already are, so people need to make their own minds up taking into account their particular circumstances as to what to do. However let's be clear, if it's the law (and I believe the EU is looking to make this much more formal than just the DTA between individual countries), then in that respect the only decision people have is if they are prepared to take on the Italian authorities. Personally I certainly have no intention of having my passport stamped for such purpose, however I do, and always have, keep records of everything - there is no surprise eh!

Interesting developments. To sum up the residence/tax residence position it appears to me that there are a number of combinations including:

1)      Resident > 3 consecutive months < 6 months in total in a calendar year – Required to register as resident but you will not be caught by the 183 day rule. Would need to demonstrate being out of Italy 183 days or more to avoid prima facie being presumed to be Italian tax resident.


2)       Resident for say 4 periods of 2 months. Do not need to register as resident but would be within the 183 day rule tax resident (subject to double tax agreement if also tax resident in another country)

3)      Resident for > 182 days incl a consecutive period of 3 months+, required to register as resident and prima facie would be tax resident (subject to double tax agreement if also tax resident in another country)

I do not know if Italy has other definitions of tax resident where stays of less than 183 days in a tax year take place (as the UK does) but I suspect it might.

From later this year I am likely to be in 3 and aim to structure my affairs for a period so that I remain UK tax resident (under UK rules) as well as Italian tax resident under its rules with the DTA tie-breaker falling on the UK side. I suspect I may end up having to demonstrate my position to the Agenzia delle Entrate and will be collecting whatever documentation/evidence I think I will need to demonstrate it.

The world is getting smaller with more and more information becoming available to the tax authorities – online and via international agreements. It is becoming increasingly difficult to stay “off the radar”. The UK authorities already collect a lot of information by trawling the net, including social media and forums and I am sure the Agenzia delle Entrate will be doing the same, as well as cross referencing residence registration with tax returns and property registers in Italy as well as abroad to maximise the tax take. Their starting point is likely to be that if registered as resident then, as Admin says, they will presume tax residence and you will need to demonstrate that you are not.

Nice summation Panner, thanks.

Great information Panner. Thank you.

The 183-day rule in our experience is not a clear-cut rule but more a guideline.    
If you work less than 183 days in some EU countries, you could still be considered tax non-resident if you don’t meet all or some of the criteria. Even as a non-resident you would normally still pay tax on any revenue you generate in that country. If you work more than 183 days, then you will become tax-resident and liable for tax on your worldwide income, i.e. revenue from your work, interest on investments, etc. You don’t have to pay tax on the same income twice if there’s an existing double taxation treaty.
 
I say throw the book at the tax dodgers   if you have nothing to hide, you hide nothing...

Thanks Casa, but I think here you are an exception if working/living in other than the UK/Italy. Italy and the UK do have a DTA and I think the >182 day rule applies to both!

An interesting article with some good definitions Fiscal Domicile

Well spotted Gala. I have bookmarked the site for further exploration.

There are some interesting articles on that site. The one you referenced appears to be aimed more at legal persons rather than individuals. It does refer to an earlier article (in January 2012) concerning individuals - mainly aimed at people leaving to establish residence abroad but covering the basics of residence in the first part. (The later article doesn't seem to indicate any significant changes to what the earlier one says). As always even though resident under the Italian provisions one you can be non tax resident by virtue of a double tax agreement (provided you are tax resident in the other country)


A (very) rough translation of the first part of the article is:

"The criteria for determining the tax residence of individuals in Italy are dictated by Article 2 of Presidential Decree n. 917/1986 ('Tax Code'), which provides that for the purposes of income tax is resident in the State individuals who for the most part of the tax period (s) are entered in the register of the resident population, (ii ) are resident or (iii) is domiciled in the State within the meaning of the Civil Code. The conditions just mentioned are alternative to each other; this means that the existence of even one of them is sufficient to suggest that a person is qualified resident for tax purposes in Italy.

As expressly stated in the tax rule, the notions which reference should be made are those of the Civil Code, which in Article 43 states that 'a person's home is the place where it has established the headquarters of his business and interests. The residence is the place where the person has his habitual residence. '
 
While the residence is linked to the permanence of the subject in a place in order sufficiently stable and the intention to live there (objective); the domicile is the concentration in a particular place of business and personal interests without requiring actual presence in this place (objective) and the desire to establish and maintain in a certain place the "Center" of General information of reports (subjective). The notion of interests which reference should be made, once limited to the economic and financial position of the entity, shall refer to the unanimous judicial interpretation, also in the moral sphere, social and family of the subject (The judgment Pavarotti did in this school).

With reference, however, the temporal aspect, the criterion adopted by the legislature is the prevalence of time during the tax period. As for the precise definition of the tax period, please refer to Article 7 of the Tax Code, according to which the reference period is the calendar year then.

As a result that, since the law refers to most of the period, the policy to be adopted is to preponderance is considered a resident individuals who have found themselves in one of the above conditions for at least 183 days (184 days in leap years)."

The full article can be found at: http://www.tasse-fisco.com/international-taxation/residenza-fiscale-persone-fisiche-italia/5968/

Thanks, Panner. I actually had a very quick look this morning at the site, which I had bookmarked some time ago, because I found it very interesting. I had to leave, so I had no time to look in detail, but, just as you said, it is a very good site with lots of useful information and comments and easier to read than the pages from the Agenzia delle Entrate.
The concept of who is a tax resident and where you pay your taxes, together with the spirit of the regulations covering double taxation was explained to us by several accountants over many years and in different countries. And this concept has not changed. What continues to be important is that those individuals, who, because of special circumstances, could be investigated, must be able to clearly prove that they are acting in a proper way. For this reason, it is most important to have all relevant information and evidence at hand. My advice will always be to have a professional adviser. Yes, it costs some money, but it saves you a lot in the long run.

Gala

I quite agree.

With regard to my situation I am a professional adviser (with a substantial number of years advising on complex UK tax issues and tax planning including some international tax) who has advised on UK tax residence/domicile issues as they affect the UK.

However, so far as the Italian side is concerned even I will be using an Italian Commercialista to deal with the Agenzia until such time as I am both proficient in Italian and my affairs are very simple.

In any case Panner, I think that it will be great for people to know that you are there and that you can consult with an Italian colleague.