In its answer to question no. 85/2022, Inland Revenue confirmed that an employee hired under a contract governed by local law by a foreign subsidiary to which they had been initially seconded and returned to Italy to be hired by the company that had originally seconded them, could benefit from the repatriated workers favourable tax regime.
The applicant was an Italian citizen residing abroad who asked the Inland Revenue whether he could benefit from the favourable tax regime for repatriated workers provided under Art. 16 of Italian Legislative Decree no. 147/2015 on his return to Italy, following his employment under an open-ended contract by an Italian company that employed him before his expatriation.
The applicant declared:
The Inland Revenue, based on the clarification made in Circular no. 33/E of 28 December 2020, stated that the benefit for “repatriated workers” is not available to taxpayers returning to Italy following a secondment abroad under the same contract and employer. According to the Agency, “if work carried out by the repatriated worker constitutes new work, by signing a new employment contract, different from the contract in force in Italy before posting, the repatriated worker assumes a different corporate role compared to the original. In this case, the worker can access the benefit from the tax period in which they transferred their tax residence to Italy.”
The tax authority specified that the benefit “is not applicable if the worker is in a situation of “continuity” with the previous work position held in the country before the expatriation at the time of repatriation, even if there is a new contract for a different company position.”
The Agency clarified that there are precise conditions that demonstrate substantial continuity of the new employment relationship compared to the one carried out before posting, namely:
The Inland Revenue considered that the Applicant may benefit from the favourable tax regime. This was because the ALFA employment relationship was new and did not meet any of the above conditions. The Agency pointed out that contractual relationship autonomy within a corporate group was not an obstacle for using the tax benefit.