Tax Pills

With today Circular letter no. 25/2023, the Italian Revenue Agency reviews the most recent developments in the legislation and practice on both the taxation of jobs performed by remote working (smart working), with specific reference to the impact of agile work on tax residence and the related taxation of income received, and on cross-border workers in the light of the innovations introduced by the latest Italy-Switzerland agreement recently translated into law (Law no. 83/2023).

On smart working - Particularly, the practice document repeats that in the absence of specific regulatory changes, the ordinary criteria to value physical presence in a given State for tax purposes apply also to smart working, both at the domestic and at the conventional level. Therefore, the only exceptions to this rule are represented by the so-called "COVID Agreements" signed during the pandemic period with border States, whose legal effects, indeed, have already expired, for both the Agreements with Austria and France, on 30 June 2022, and, for the Agreement with Switzerland, on 31 January 2023.

On the new measures of the renewed agreement with Switzerland - In addition, the Circular letter illustrates the fiscal changes brought about by the provisions contained in the new Agreement between Italy and Switzerland on the taxation of cross-border workers, which amends the one of 2020. These novelties, introduced by Law No. 83 of 13 June 2023 in the domestic system, mainly concern Article 4, which raises, but only as of 2024, the no-tax area for employment income received by Italian frontier workers from euro 7,500 to euro 10,000. This increase applies to all frontier workers and not only to those working in Switzerland. And again, Article 5 provides for the deductibility from the total income, for the amount resulting from appropriate documentation, of the social security contributions for early retirement contractually payable by frontier workers to the social security institutions of the state in which they work. This novelty also only takes effect from 2024 and affects all frontier workers. And finally, it is reiterated that the decree of the Minister of Economy and Finance signed on 20 July 2023 and published in the Official Gazette no. 175 of 28 July 2023 has definitely stated Switzerland's exit from the list of privileged states for IRPEF purposes set forth in the ministerial decree of 4 May 1999 (the so-called 'black list for natural persons').

Stefano Latini

Both the request form and instructions are ready for regularising crypto-assets owned and/or related income realised by 31 December 2021. This thanks to a Revenue Agency Act that has approved the application form and sets out the timetable and rules for accessing the procedure provided for by the last Budget Law (no. 197/2022). The application must be sent by 30 November 2023 after paying the penalty for the violation of tax monitoring obligations (RW panel) and/or the tax on any undisclosed income originated by crypto-assets. The procedure is open to taxpayers who are individuals, non-commercial entities and simple partnerships resident in Italy. The Revenue Act also approves an outline of the accompanying report to attach to the application.

Interested parties - Individuals, non-commercial entities and simple and equivalent partnership companies (within the meaning of Article 5 of Presidential Decree No. 917/1986) resident in Italy who, by 31 December 2021, possessed crypto-assets in violation of tax monitoring obligations and/or omitted to indicate the relevant income derived by their possession within tax returns, are eligible for regularisation.

Timelines and instructions - The application must be sent, exclusively via pec, by 30 November, to the Regional Directorate of the Revenue Agency competent according to the tax domicile of the taxpayer in the last tax year affected by the procedure. The application must be accompanied by the receipt of the F24 payment, to be made in a lump sum, and the ad hoc report with the useful documentation to probe the origin of the sums invested, such as the bank accounts relating to the purchase of the crypto-assets and any other document through which the traceability of the crypto-assets to the applicant can be deduced. Furthermore, to remedy the failure to comply taxpayers must pay a penalty for the breach of tax monitoring obligations equal to 0.5 per cent of the value of the undeclared cryptocurrencies for each year and/or a substitute tax equal to 3.5 per cent of the value of the crypto-assets, including cryptocurrencies, whose income were omitted.

Stefano Latini