Tax Aspects of International Remote Working Following the Reform of Tax Residence

Abstract

This article analyses the new Italian rules on the tax residence of individuals, which came into force in 2024. Legislative Decree No. 209/2023, in particular, has amended the criterion for attributing residence based on domicile – now defined exclusively in terms of the taxpayer’s family and personal relationships – and has introduced a new criterion based on verifying the taxpayer’s mere physical presence within the territory of the State for more than half of the tax year. Taking into account the interpretative guidelines emerging from the most recent tax doctrine and in the notices and rulings of the Italian Revenue Agency, this essay discusses these innovations and argues that they have profoundly altered the way in which the entire concept of tax residence is conceived and applied. Furthermore, the essay analyses the effects that the tax residence reform has on remote working and so-called digital nomadism, phenomena that the tax legislator has explicitly taken into account. By also analysing the tax relief measures provided for new residents, the essay examines the extent to which tax factors can influence, in Italy, the development of these increasingly widespread forms of work organisation and lifestyle among workers, and assesses the extent to which Italian tax legislation is consistent and appropriate in relation to them.