Italian Tax incentives for foreign Professors and Researchers: 10% taxable income

In 2019 Italy expanded tax incentives applicable to foreign Professors and Researchers that transfer their residence to Italy after they have worked abroad.

Italian tax incentives for Professors and Researchers: requirements

In 2019, Italian tax law provided an expansion of the tax incentives for the “brain return” (according to art. 44 of Legislative Decree n. 78/2010),  to facilitate also the transfer of Italian and foreign Professor and Researchers to Italy.

Notably, the Italian tax law provides that  Professor and Researchers can benefit from these tax incentives provided that they:

• have a university degree or equivalent;

• have not occasionally been resident abroad;

• have carried out documented research or teaching activity abroad at public or private research centres or universities for at least 2 consecutive years;

• consequently, acquire tax residence in the territory of Italy.

The tax incentive for Professores and Researchers transferring to Italy concerns the income of employees or self-employed workers that they produce in Italy upon their return.

Furthermore, as regards self-employment, the fees perceived do not contribute to the value of net production for the Italian tax “IRAP”.

Tax incentives for Professors and Researchers: duration of benefit and reduction of taxes to 10% of income

Tax benefits for Professors and Researchers can be considered the most convenient among the others tax incentives for the “brain return” since they involve a reduction of the 90% of the taxable income so that taxes remain due only on the remaining 10% of the income perceived.

The ordinary duration of the benefit for Professors and Researchers is 6 years, provided that the taxpayer remains resident in Italy.

Instead, tax benefits rise to 8 years if the Professors or Researchers have one minor or dependent child (even in pre-adoptive custody).

Also, tax incentives last for 8 years for Professors or Researchers that become owners of at least one residential property unit in Italy, following the transfer to Italy of the residence or in the twelve months before the transfer, provided that they remain resident in Italy. The real estate can be purchased directly by the Professor or Researcher or by his spouse, cohabiting partner or children, even in co-ownership.

Furthermore, the benefit rises to 13 years for Professors and Researchers who have at least three minor children or dependent children (even in pre-adoptive custody), after their transfer of residence in Italy, provided that tax residence remains in Italy.

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Antonio Merola, LL.M.

Tax Lawyer specialized in International Taxation at the International Tax Center of the University of Leiden (The Netherlands) by attending the LL.M. (Master of Laws) in International Tax Law (after a University Master in International Tax Planning and a University Master in Tax Law in Italy), for several years he has been dealing with Tax Consulting and Tax Litigation in favour of Individuals and Companies.