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Tempo di lettura 5m – Edited by Paolo Tormen and Dario Ceccato

After almost a month the Revenue Agency deals again with the tax treatment of posted employees, with Italian registered residence, who work in Italy, in smart working because of the pandemic situation.


The Proposed Case

A Company, with registered office in Italy and belonging to a German Company Group, decided to post an employee to the German subsidiary. To this end, parties signed a secondment contract with the following details:

  1. The working activity was meant to be carried out entirely in favor of the German subsidiary – with possibility to performance dislocation in other foreign countries, for business trips, visits to foreign branches etc;
  2. the working performance was to take place from the 1st of April 2021 to 31st of March 2023, with possible extension to the 31st March 2026;
  3. for the performance of Sales Manager working tasks;
  4. Even though the activity performed in Germany concerned at least 183 days over a 12 months period, according to the agreements with the Company, occasional Smart Working either from Germany or from other countries was admitted.


Article 51, paragraph 8-bis, of the Italian Consolidated law on income tax (following also TUIR), provides that “the income from employment, provided abroad on a continuous basis and as the sole purpose of the relationship by employees who stay in the foreign country for more then 183 days during a twelve-month period, is determined on the basis of the foreign tax table defined annually with the decree of the Ministry of Labor and Social Policies established annually by January 31st “. This is a method of determining the tax base and is not strictly connected to the compensation actually paid to the employee.

The aforementioned criterion for determining income, which applies exclusively to employees with Italian registered residence, pursuant to Article 2, paragraph 2, of the Tuir, can only be applied if the following conditions are met:

  • the employee, operating abroad, is classified in one of the categories for which the aforementioned Decree sets the foreign tax base;
  • the job is carried out abroad with a permanent or stable nature;
  • the performance carried out abroad is the sole purpose of the employment relationship and, therefore, the working activity is carried out entirely abroad;
  • within twelve months the employee stays in the foreign country for a period exceeding 183 days. It should be noted that the mentioned 12 months do not refer to the tax period but to a period of 12 months starting from the posting, as stated by the secondment agreement.


It is however provided that if the posting concerns a State that signed with Italy a double taxation agreement, the provisions of this latter agreement shall take precedence over national provisions (and so also of art 51 of the Consolidated law on income tax). In this case, the double taxation agreement provisions prevail over the internal tax provisions.

The solution of the Revenue Agency

As reported by the Revenue Agency, both national and international agreements, including that signed between Italy and Germany, refer expressively to the place of work (basing on the tax territoriality principle) in identifying the tax authority).

Therefore, if the work activity is carried out in Italy, according to a smart working contract as governed by Legislative Decree 81/2018, particular attention must be paid to one of the conditions provided for by art. 51, paragraph 8-bis of the TUIR and that is the stay of the employee for at least 183 over twelve months in the foreign State.

Verifying the length in time of the abroad stay of the employee – at least 183 days over 12 months – the days carried out in Smart Working in Italy must not be considered, even if based on the istructions of the Foreign Company and pursuant to the posting agreement.

It is recalled that, for the effective count of the days spent abroad by the employee, the holiday period, holidays, weekly rest periods and other non-working days are included in the calculation of the 183 days, regardless of the place in which they are spent (ref. Ministry of Finance circular no.207 of 16 November 2000 and Revenue Agency circular no.17 / E of 23 May 2017).


Table 1



Annual days


Annual days

Presence abroad



Public Holidays



Annual Leave



Weekly rest



Days of Smart Working in Italy



Applicability of article 51, paragraph 8-bis, of the Italian consolidated law on income tax






In first place, it seems appropriate to underline that the application of Article 48, paragraph 8-bis of the Italian consolidated law on income tax, exclusively concerns employees who physically perform their activities abroad, immediately excluding workers with so-called Global roles but who carry out their business with priority from Italy.

With regards to employees who, having a foreign posting contract or a prevalent foreign role, are carrying out activities in Smart Working from Italy, also due to the constraints caused by the epidemiological emergency. The Revenue Agency with circular no. 7 of January 26, 2001 had already clarified that it is not necessary to wait for the completion of the 183 days of stay abroad in order to apply the conventional salaries, stating that “If the contract provides for a stay abroad for a period exceeding 183 days, the withholding agent will apply the taxation provided for therein starting from the first remuneration paid, except for an adjustment to be made if the conditions required for the application of the regime referred to in Article 48, paragraph 8-bis no longer exist. “

Now, according to the present situation, we may find ourselves having to rectify what has been applied so far, in the event that the employee performs a period of work abroad of less than 183 days. Let’s think of the case of an employee posted abroad, specifically in India, starting from 01.01.2021 and unable to reach the foreign office after returning to Italy on 02.15.2021. It is clear that if this situation were to persist until the end of 2021, working in Smart working in Italy for the the Indian subsidiary, the conventional salaries that the Italian company had initially and correctly used for the calculation of monthly taxes would turn out to be incorrect and so necessitate of adjustments.

In addition, any foreign allowance that, in application of a conventional tax regime pursuant to art. 51-paragraph 8-bis of the TUIR do not affect the tax rate applied, in case of adjustment of the employee’s position, they would be included in the monthly wages of the employee useful for the calculation of taxes.


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