Tax benefits for Italians returning to Italy

Living abroad and thinking of returning to Italy for work? You may not know this, but the Italian government offers tax benefits to those who would like to make Italy their tax residence after years of working or studying abroad. To understand how this works and who’s eligible for these tax benefits, we’ve created a brief guide to explain the incentives of what the Italians call rientro cervelli. 

The Italian tax authorities have implemented measures to support the country’s economic, scientific, and cultural development and attract quality professionals. These consist of tax benefits in support of:

• rientro dei cervelli—or “brain re-entry” in English
• new resident workers

First, let’s get some terminology straight. In Italian, the phrase cervelli in fuga—or “brain drain”—is employed to talk about teachers and researchers residing abroad. Consequently, “brain re-entry” refers to these citizens’ return to the Italian academic system. New resident workers, on the other hand, are those who return to live in Italy to work for Italian companies. This includes: 

• Graduates who’ve worked abroad
• Students who’ve earned an academic degree abroad
• Managers and workers with high qualifications and specializations

What are the incentives for returning to Italy? In short, those who return get special tax benefits. To access these incentives, there are specific requirements for each category of worker.

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Academic staff, teachers, and researchers who move their tax residence back to Italy enjoy a 90% IRPEF (Italian income tax) exemption on earnings derived from teaching and research activities. This means that only 10% of these earnings will be subject to income tax, while the remaining 90% will not be taxed.

To take advantage of this benefit, you’ll need to:

• Have a university qualification, or equivalent
• Have resided abroad on a non-occasional basis
• Have carried out research or teaching activities for at least two sequential years abroad, at universities, or public or private research centers
• Return to Italy to carry out teaching or research activities
• Move your tax residence back to Italy

As described by the 2019 Growth Decree, the benefits of rientro cervelli come into effect starting from the tax period in which you become a resident of Italy. You can then benefit from this status for the following six years.

New resident workers who decide to return to Italy will receive a 70% IRPEF (income tax) exemption on earnings from both employment and self-employment carried out in Italy. Furthermore, those who perform their activities on a freelance basis will not have to pay IRAP.

To take advantage of this benefit, you’ll need to:

• Have a university degree and have carried out a contract, self-employed, or business activity outside Italy—without interruption—in the last 24 months or more

or:

• Have continuously carried out a course of study outside Italy in the last 24 months or more and have obtained a degree or a post-graduate specialization
• Move your tax residence back to Italy with the intention of residing there for at least 2 years
• Carry out your work mainly within Italy

 This type of benefit has a duration of five years.

I’m not registered with AIRE. Can I take advantage of this new tax deduction? 

Yes—even Italian citizens who are not registered in the Registry of Italians Resident Abroad (AIRE) and who have returned to Italy starting from 2020 can access this tax benefit, provided they’ve previously resided in another country considered established against double taxation on earned income.

Can these tax benefits be extended?

If you have at least one dependent child (including one in adoptive pre-custody) or if you’ve purchased a property in Italy, you can request the extension of the tax benefit for another five to ten years, depending on whether you are an employee, new resident worker, or researcher/teacher.

For more information and important updates on the program for the rientro cervelli and new resident workers, visit the Legislation on New Resident Workers of the Revenue Agency.

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