Court Ruling Paves Way for Double Tax Relief for Italy Residents

Marco Mesina
Milan

Marco Mesina details how a new ruling unexpectedly allows taxpayers to opt for multiple special tax regimes in the same fiscal year.

In a very recent ruling – n° 16, January 28th, 2025 – the Italian tax authorities unexpectedly have granted a taxpayer the possibility of opting, in the same fiscal year, for more than one special tax regime.

In the case under examination: The special tax regime for “university professors and researchers” and the new “Inbound” regime (Lavoratori Impatriati).

The taxpayer moved back to Italy in 2024 to begin working as a university professor while also planning to start a private dental practice.

He asked whether it would be possible to apply the two special tax regimes simultaneously: Article 44 of Decree-Law 78/2010 (for researchers and professors) and the new “Inbound Workers Regime” introduced by Article 5 of Legislative Decree 209/2023 in force from 2024.

What the Tax Authorities Said

The Tax Agency acknowledged that, in contrast with the prior legislation, neither the new inbound workers regime nor the researchers/professors regime contains any explicit legal provision prohibiting their simultaneous application.

The previous limitation explicitly referred to the former version of the inbound workers regime (under Article 16 of Legislative Decree 147/2015), which the government had repealed as of December 2023.

Therefore, the taxpayer was allowed to benefit from both regimes for different sources of income: The inbound workers regime applied to his freelance income as a dentist, while the researchers’ regime applied to his university salary.

A Change in Interpretation

This decision marks a turning point. In the past, Circular 17/E (2017) clearly prohibited the combination of the inbound regime and other special regimes.

However, the previous interpretation no longer holds since the government abrogated Article 16 and replaced it with Article 5 of Legislative Decree 209/2023.

The absence of an explicit prohibition now allows for a more flexible approach, and the ruling confirms this new interpretative stance.

Can the Same Reasoning Apply to the Flat Tax Regime?

This opens the door to a more interesting question: Can the same reasoning apply to the special tax regime for new residents (the so-called Italian Flat Tax)?

The flat tax for new residents – ruled by Article 24-bis of the Italian Tax Code (TUIR) – offers a fixed annual tax of €200,000 on all foreign-sourced income, regardless of amount.

Family members can also benefit from the regime at a reduced rate of €25,000 per person. One major advantage of this regime is that it can be confirmed in advance by filing a tax ruling (interpello), even before relocating to Italy, giving high-net-worth individuals more clarity before moving to Italy.

This regime has historically not been compatible with the former inbound workers regime.

The 2017 guidance (Law 232/2016, Article 1(154)), which stated that people could not combine the flat tax regime with the inbound regime (then under Article 16 of Legislative Decree 147/2015), expressly clarified this issue.

However, the legislative landscape has changed. The old regime is no longer in force. The new inbound regime, as established by Article 5 of Legislative Decree 209/2023, includes no reference to any incompatibility with the flat tax regime.

In the absence of an express legal prohibition, and based on the logic used in the recent ruling n. 16/2025, one may argue that a taxpayer might benefit simultaneously from the flat tax on foreign income and the inbound regime for domestic employment or self-employment income, as long as the requirements of each regime are met and they apply to different sources of income.

Overview of the New Inbound Workers Regime

The new inbound workers regime, applicable from 2024, grants a 50% exemption on employment or self-employment income produced in Italy.

In some cases (e.g., workers with minor children), the exemption increases to 60%. However, the benefit is capped to €600,000 of annual Italian income and is conditional on:

• The taxpayer not having been a tax resident in Italy in the past three years (six or seven years if the taxpayer was previously employed in Italy by the same company or another company in the same corporate group);
• A minimum four-year commitment to reside in Italy;
• The gainful activity is mainly in Italy;
• The possession of high qualifications or specializations.

This regime replaces the previous, more generous one, which offered a 70% or even 90% deduction under certain conditions.

Recommendation: Submit a Tax Ruling

Given the complexity and the evolving interpretation of these rules, filing a tax ruling (interpello) with the Italian Tax Authorities is highly recommended.

It allows taxpayers to obtain a binding answer on their specific case before making strategic relocation decisions.

Such advance clearance is especially useful for those considering combining the flat tax regime on foreign income with the inbound regime for Italian-source income.

Final Thoughts

The recent tax ruling clearly signals a more open and favorable interpretation of the rules regarding special tax regimes in Italy. While the court has confirmed the compatibility between the new inbound workers regime and the researchers’ regime, extending the same reasoning to the flat tax regime would be consistent.

If you are considering relocating to Italy and wondering whether you can benefit from more than one special regime, it is worth exploring this possibility and obtaining certainty through a formal tax ruling.