Ruling N.36 / February 7, 2020

It is of utmost importance to inform Globalaw network of the following:  with a recent Ruling (which is an official position paper of the Italian Revenue Agency) Tax authorities (from now on ITA) officially confirmed that, for the purposes of the Italian tax legislation (and tax treaties in force which are OCED – patterned), employment income (reddito di lavoro dipendente under Italian tax law) should be considered as tax sourced in Italy based on a specific ratio which takes into account days in which the individual actually worked in Italy and the total number of working days under the employment agreement (so that it is of utmost importance to draft the same correctly).

We have to remark that such a ruling confirms previous official opinions of the Italian tax authorities but such a confirmation is of utmost importance as employment income is subject to Withholding tax at source (WHT) and mistakes concerning WHT may trigger penalties upon the employer also.

We are delighted to inform you that Quorum tax department is available for any further comment you may need

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