The Revenue Agency has recently published Circular No. 20/E/2024, which clarifies the new provisions regarding the tax residence of individuals, companies, and entities following the International Taxation Decree (Legislative Decree No. 209/2023). These changes will come into effect on January 1, 2024, and entail significant modifications in the definition of the concept of “domicile.”
### Changes in the Concept of Domicile
Under the new rules, domicile is no longer based solely on the provisions of the civil code, but also takes into account personal and family relationships. This approach aligns with international practices, prioritizing emotional ties over economic ones. It is important to note that any provisions established by Double Taxation Agreements remain valid.
The informational document also includes practical examples to facilitate the understanding of the introduced changes.
### New Rules for Individuals
One of the main innovations concerns the definition of tax residence for individuals. From now on, it will be sufficient to spend **183 days** in Italy (or **184 days** in a leap year) to be considered a tax resident. The circular provides clarifications on how to calculate fractions of days and establishes that those who work remotely in the country for most of the tax year will automatically be regarded as tax residents.
Furthermore, registration in the resident population registry will serve as a relative presumption of tax residence: this means that the taxpayer can challenge this presumption by providing contrary evidence.
### Regulations for Companies and Entities
The new rules also apply to companies and entities. Those that have their legal headquarters, effective management, or ordinarily conduct their activities in Italian territory for most of the tax period will be considered residents. These criteria are alternative; therefore, it is sufficient to meet just one of them for tax residence in Italy to be established.
Compared to previous regulations, the criterion based on the “main object” of the activity as a parameter for determining residence has been eliminated.
Italian Version
