Inbound Tax Regime and Remote Working for a Foreign Employer
What Italian Revenue Agency Ruling No. 2/2026 clarifies on requirements, timing and practical application
The new tax incentive regime for inbound workers, introduced by Article 5 of Legislative Decree No. 209/2023, may also apply to individuals who relocate to Italy while continuing to work remotely for a foreign employer.
Italian Revenue Agency Ruling No. 2/2026 confirms that the employer’s location is not a disqualifying factor, that remote working is compatible with the regime provided the activity is mainly carried out from Italy, and that the starting date of the tax benefit depends on the effective transfer of Italian tax residence, rather than on the mere physical return to the country.
Where no Italian withholding agent is available, the tax benefit may be claimed directly through the annual tax return.
This article reconstructs the relevant legal and interpretative framework and translates it into practical operational criteria.
Why the combination of “inbound regime + remote working” has historically created uncertainty
Remote working has made structurally common a situation that, until a few years ago, was marginal: working for a foreign-based employer while living permanently in Italy.
When this scenario overlaps with a return to Italy, the issue is not the legality of remote work itself, but rather the correct tax qualification of the income and the eligibility for the inbound workers tax regime.
For a long time, the lack of explicit clarification under the new regime led to conservative interpretations: the assumption that the employer had to be Italian, or that remote working was, per se, a risk factor.
Ruling No. 2/2026 directly addresses this point, providing an interpretation consistent with the structure and purpose of the legislation.
The new inbound workers regime: the correct legal framework
Starting from tax year 2024, the inbound workers tax regime is governed by Article 5 of Legislative Decree No. 209/2023.
The provision allows qualifying employment income, assimilated income and self-employment income produced in Italy to be taxed on only 50% of their amount, up to an annual cap of EUR 600,000, provided that the statutory personal and temporal requirements are met.
Two elements are central:
- the transfer of tax residence to Italy pursuant to Article 2 of the Italian Income Tax Code (TUIR);
- the territorial sourcing of income, assessed under the general rules of the TUIR (Article 23).
The legislation does not require the employer to be resident in Italy, nor that the employment relationship be established with an Italian entity.
This often-overlooked aspect is one of the key points clarified by administrative practice.
Discover the requirements to apply for the Inbound workers tax regime
Remote working, foreign employer and “income produced in Italy”
Ruling No. 2/2026 reiterates a long-standing principle of Italian tax law: for employment income, income is deemed to be produced in Italy when the work activity is physically carried out in Italian territory, regardless of the employer’s location or the place where remuneration is paid.
In this sense, remote working is not an exception requiring special justification, but simply a mode of performing the activity.
What matters is where the employee actually performs their work for the majority of the tax year.
This highlights the true dividing line:
not “remote working yes or no”, but the prevalence of work activity in Italy and consistency between tax residence and factual working arrangements.
The case analysed in Italian Revenue Agency Ruling No. 2/2026
The practical relevance of the ruling emerges clearly from the specific case examined by the Italian Revenue Agency.
The taxpayer:
- worked abroad for several years;
- was registered with AIRE (Register of Italians Resident Abroad);
- returned to Italy during 2025;
- entered into an open-ended employment contract governed by an Italian national collective labour agreement (CCNL);
- worked remotely from Italy;
- provided services to an employer established abroad.
The questions raised concerned three aspects: applicability of the regime, starting date of the benefit and method of claiming it.
Compatibility between remote working and the inbound workers regime
On the first point, the Agency’s position is unequivocal: the foreign location of the employer does not preclude access to the regime.
Remote working is compatible, provided that the work activity is mainly carried out from Italy and that the income qualifies as Italian-sourced.
Timing of the tax benefit
On timing, the Agency adopts a strict but coherent approach.
Despite the physical return to Italy in 2025, the taxpayer may apply the regime starting from tax year 2026, as this is the year in which Italian tax residence is effectively established.
Method of claiming the benefit
Finally, in the absence of an Italian withholding agent, the tax relief may be claimed directly through the annual income tax return.
Key takeaways from the case
This case clearly shows that:
- the foreign employer is not the issue;
- remote working is not the issue;
- timing and tax residence are the real critical factors.
It also illustrates a common planning mistake: assuming immediate eligibility upon return, without considering the annual mechanics of Italian tax residence.
The percentages are the same for everyone. The saving is not: it depends on your income, your contract and the year you moved.
Summary table – Inbound workers regime requirements for remote working with a foreign employer
| Legal requirement | What the law/practice requires | What to verify in practice |
|---|---|---|
| Transfer of Italian tax residence (Art. 2 TUIR) | The taxpayer must be Italian tax resident in the year of application | Actual return date; days of presence; domicile and residence; centre of personal and economic interests; registry consistency |
| Prior non-residence | Non-residence in Italy for the periods required by Art. 5 of Legislative Decree 209/2023 | Tax residence history; absence of uninterrupted prior Italian tax ties |
| Work mainly carried out in Italy | The activity must be performed “for the most part” from Italy | Work calendar; business travel; hybrid arrangements; supporting documentation (policies, agreements, tracking) |
| Italian-sourced income (Art. 23 TUIR) | For employment income, the place of performance prevails over employer location | Confirmation that work is performed in Italy; allocation of Italy/foreign days if applicable |
| Foreign employer | Not a disqualifying factor | No automatic conclusions: focus remains on sourcing and prevalence |
| High qualification or specialisation | Subjective requirement under Art. 5 | Education, role, professional profile consistency |
| Starting date of the regime | First tax year in which Italian tax residence is established | Caution with mid-year returns: benefit may shift to the following year |
| Method of claiming | Direct claim via tax return if no withholding agent | Cash-flow planning; correct tax return completion |
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Conclusion: compatibility yes, automatic entitlement no
Italian Revenue Agency Ruling No. 2/2026 is now a key reference point for individuals returning to Italy while working remotely for a foreign employer.
The message is balanced: the inbound workers regime is compatible with remote working and with a foreign employer, but it requires a substantive assessment of the facts, careful timing and consistent documentation.
For those planning a return, the right question is not “can I access the regime?”, but rather:
when, how and under what conditions can I apply it without exposing myself to unnecessary tax risk? Those three questions are answered by a check on your specific case, not by a general rule.
Official sources
This article is based on official legislative and administrative sources, including:
- Agenzia delle Entrate – Ruling No. 2 of 12 January 2026
Clarifications on the applicability of the new inbound workers regime in cases of remote working for a foreign employer, timing of the benefit and method of claiming it. - Legislative Decree No. 209 of 27 December 2023 – Article 5
New inbound workers tax regime (effective from tax year 2024). - Italian Income Tax Code (D.P.R. No. 917/1986) – Article 2
Tax residence of individuals. - Italian Revenue Agency Circular No. 33/E of 28 December 2020
Interpretative principles on tax residence and income sourcing, also relevant under the new regime.
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