Information for specific categories of workers

Latest update: 01/02/2022

In Italy, ‘withholding agents’ (employers or principals) withhold tax on the amounts they pay to:

• employees and workers who receive an income as employees. The same applies to pensions paid by pension institutions to pensioners;
• self-employed professionals, i.e. self-employed persons with registered VAT numbers;
• occasional self-employed workers who do not provide their services habitually and are therefore not required to have a VAT number.

The amount of deductions is stated in the Single Certificate(IT) that the withholding agent delivers to the worker or pensioner each year. Withholding taxes are called ‘advance payments’ because the income to which they apply are subject to ordinary taxation and must be indicated in the tax return. Withholding taxes should also be indicated in the return and reduce the overall tax liability of the taxpayer.

For self-employed professional workers resident in Italy, the withholding tax is 20%.

However, if the self-employed person is not resident in Italy, the withholding tax is 30 % and is ‘for tax purposes’, i.e. it is definitive and does not need to be included in the tax return.

Self-employed persons residing in Italy

If you work as a self-employed person on a regular, continuous and exclusive basis with an entity resident in Italy, you must:

• register for a VAT number
• carry out all tax obligations in the course of your business. The first step is to verify whether the activity may fall within the scope of the flat-rate scheme. If it is not covered by the flat-rate scheme, the following requirements are laid down:
  • keep accounting records
  • file a tax return using the Redditi PF form (in particular the LM box)
  • submit the Summary Reliability Indices (ISA) form, if necessary
  • submit an IRAP (trade income) tax return, if necessary
  • fulfil any VAT obligations.

Employees posted abroad

A worker posted abroad is an employee who works in a foreign State under the management of a person other than his employer.

If the worker posted abroad is resident for tax purposes in Italy, he or she must also declare the income generated abroad in Italy. If work abroad is carried out exclusively and continuously for more than 183 days over a period of 12 months, the employee’s income is calculated on the basis of the ‘conventional wages’, fixed annually by decree of the Ministry of Labour and Social Policy (see Circular No 207/E of 16 November 2000(IT), paragraph 1.5.7).

If the worker is not resident for tax purposes in Italy, usually only the income generated in Italy is declared in Italy. However, if there is a double taxation convention with the foreign country of residence or income generation, the rules laid down in the convention must be followed.

Workers residing in cross-border Italy

For persons resident in Italy who, on a continuous and exclusive basis, work abroad in border areas and in other neighbouring countries, that portion of their income exceeding EUR 7 500 is taxable for Irpef purposes.

Employees of companies in another EU country posted to an Italian subsidiary

Employees of companies established in another EU country who are posted to a subsidiary company in Italy follow the ordinary rules on employee income (Article 51 (1) to (8) of Presidential Decree No 917/86).