Abstract

The Italian Revenue Agency has provided an answer to an inquiry (response to inquiry no. 119 of the Italian Revenue Agency of January 20, 2023) regarding the possibility of considering a visa for elective residence in Italy as equivalent to registration in the population registers for the purpose of tax residence. The response confirms that possession of the visa does not automatically equate to registration and does not constitute in itself a criterion for determining tax residence in Italy.

Comment

The response to inquiry no. 119 of the Italian Revenue Agency of January 20, 2023 provides a detailed analysis of the issue raised by a British citizen residing in Switzerland regarding the possibility of considering a visa for elective residence in Italy as equivalent to registration in the population registers for the purpose of tax residence. The taxpayer asks if, despite a stay of less than 183 days in Italy, possession of a permit for elective residence can still constitute a presumption of tax residence under Article 2, paragraph 2 of the Income Tax Code (TUIR).

The inquiry highlights how Article 2, paragraph 2 of the TUIR establishes tax residence through three alternative criteria: registration in the population registers, civil law domicile (place where the person has established the main seat of their affairs or interests) and civil law residence (place where the person has their habitual residence). As alternative criteria, the elective resident argues that it is sufficient for one of them to exist in order to be considered a resident in Italy. International regulations are also invoked, which state that in order to be considered residents in a country, people must have their habitual residence in that country, or spend most of their time in that country. In summary, the inquiry asks if possession of a visa for elective residence and a stay of less than 183 days in Italy can still consider the elective resident as a tax resident in Italy.

The Italian Revenue Agency clarifies that according to Italian tax regulations, the tax residence of an individual is determined by the existence of at least one of the alternative criteria provided for by Article 2, paragraph 2 of the TUIR, namely registration in the population registers, civil law domicile or civil law residence. Possession of a permit for elective residence, therefore, does not automatically equate to registration and does not constitute in itself a criterion for determining tax residence in Italy.

The Italian Revenue Agency however, points out that although possession of a permit for elective residence does not automatically equate to registration, administrative jurisprudence considers the intention to establish an "actual residence" in Italy to be a key factor in obtaining the visa.