How the workers’ impatriate regime affects British citizens

How the workers’ impatriate regime affects British citizens



Question:  I’m a British national who benefits from “moving to Italy” tax regime, the so-called ‘regime speciale per lavoratori impatriati’. Since this now excludes non-EU citizens, am I still eligible for it after Brexit?

Answer:  Italy’s Revenue Agency (L’Agenzia delle Entrate) has extended recognition of the “impatriate” (move-to-Italy) regime for British citizens, on the basis of the Brexit Withdrawal Agreement of 2020.

Special tax program for British people who moved to Italy

According to Italian law, specifically Article 16 of Legislative Decree No. 147/2015, this program offers temporary preferential taxation, granted to workers who move (or moved) to Italy.

To benefit from it, the worker must:

  • Register as a resident in Italy;
  • Not have been a tax resident of Italy in the two past Italian tax years (from 2st January to 31st December) and must then be a tax resident in Italy for at least 2 years;
  • Work predominantly in Italy.

For eligible taxpayers, in the tax period when they move to Italy and in the following four tax periods, taxable employment income for these workers is limited to 30%, and is reduced to 10% if they reside in Abruzzo, Molise, Campania, Puglia, Basilicata, Calabria, Sardinia or Sicily (or some small villages of Lazio, Marche and Umbria). 

As introduced in the Budget Law 2021 (Legge di Bilancio), the benefits apply for another five tax periods to workers with at least one minor or dependent child and to those who buy a residential property in Italy after moving (or in the previous 12 months).

For this extension period of another five years, taxable income is set at 50%, or 10% in the case of workers with at least three underage or dependent children.

According to Article 1 of Budget Law 2021, non-EU citizens became excluded from being able to extend the tax relief regime (although an exception is made for non-EU states that have a double taxation agreement).

Post-Brexit, the updated measure left British nationals in limbo as to whether they could continue to benefit from it.

However, the Brexit Withdrawal Agreement, which came into force on February 1st, 2020, prohibits discrimination against British citizens on the basis of their nationality and forbids that British workers be denied the same tax benefits granted to other EU workers.

British workers’ rights under the Brexit Withdrawal Agreement

To formalise this, Italy’s Inland Revenue Agency clarified its position regarding the recognition of the impatriate program for any British citizens in a ruling, in April 2022.

It stated that British nationals who had benefited from the regime by December 31st, 2019, and who met the requirements to apply for its extension, could continue to work under its provisions.

Therefore, if a British national worker was already a beneficiary of the regime by December 31st, 2019, they can continue to operate under it after Brexit and apply for the five-year extension.

The Agency stated that “on the basis of Article 24 of the aforementioned Agreement which, making explicit reference to EU Regulation No 492/2011, guarantees that UK nationals enjoy ‘the same social and tax advantages as national workers’, the extension of the impatriate workers’ relief may be recognised”.

Italian tax and accounting services for expats

We offer comprehensive tax services ranging from tax profile assessment, tax payment projection, tax return preparation and filing for all the “move-to-Italy” tax programs, including the “regime impatriati”, and we would be very glad to assist and guiding you through the process.

Should you like to discuss your personal circumstances and get a projection of your Italian tax opportunities and obligations, you can schedule a consultation with our English speaking tax and accounting advisors.

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