New Tax Residency Rules: Clarifications from the Italian Revenue Agency

The Italian Revenue Agency, through Circular No. 20/E/2024, has clarified the new tax residency rules effective from 2024, following amendments introduced by Legislative Decree 209/2023. The key changes concern the criteria for determining the tax residency of individuals, now based on four alternative elements: registration in the Resident Population Register, domicile, residency under civil law, and physical presence for most of the tax year. For companies and entities, residency is determined based on their legal seat, place of effective management, or primary operational management. The circular also clarifies the relationship between these new rules and tax relief schemes, as well as the potential impact on double taxation treaties.