The expat tax regime has been one of the most used tools for years to attract managers, professionals and qualified workers to Italy. The discipline, however, has generated numerous doubts in application, especially in cases of return after a period of secondment abroad to a group company.
The question is well known: can the worker who returns to Italy to the same employer, or in any case within the same group, benefit from the tax relief regime? And, after the reform introduced by Legislative Decree of December 27, 2023, n. 209, has the answer changed?
To these questions is added today another one, of particular interest for HNWIs, international managers and family offices: can the new expat tax regime be combined with the flat tax for new residents pursuant to art. 24-bis of Tuir?
Old expat tax regime: the issue of seconded workers
The previous art. 16 of Legislative Decree n. 147/2015 recognized, under specific conditions, partial exemption from taxation for five tax periods extendable by a further five in the presence of dependent children or property purchase, of dependent employment income (70% and up to 90% in case of transfer to certain regions of southern Italy), assimilated, self-employed and, in certain cases, business income produced in Italy by subjects transferring their tax residence in the territory of the State.
However, the rule did not contain specific rules for workers returning from foreign secondment. Specifically, it did not provide, among the access requirements, discontinuity of the employment relationship. Hence the interpretive contrast.
The Italian Tax Authority, with Circular n. 17/2017, had adopted a restrictive interpretation, generally denying access to the regime to workers returning to Italy after secondment, on the assumption that the return occurred in continuity with the previous employment relationship and did not realize the attractive purpose of the rule.
The position was subsequently attenuated with Resolution n. 76/2018, which admitted the tax relief in cases where the secondment had been prolonged or extended multiple times and the return to Italy occurred in a different work position than that held before expatriation, for example with new duties, greater responsibilities or career advancement.
Case law changes interpretation of the expat tax regime
With Circular n. 33/2020, however, the Tax Authority returned to requiring a particularly qualified discontinuity, valuing elements such as a new contract, a new legal title of the relationship, non-preservation of seniority and, in some cases, a new probationary period.
Case law has progressively resized the Tax Authority’s approach.
The central point is simple: art. 16 of Legislative Decree n. 147/2015 did not contemplate, among the access requirements, any condition of employment relationship discontinuity. The prerequisites of the tax relief were expressly identified by the rule and did not include the conclusion of a new contract nor the change of employer.
From this perspective, the circulars of the Tax Authority cannot introduce conditions beyond those established by law. This is what was stated, among others, by the Milan Court of Tax Justice, n. 1125/2025, which recognized the applicability of the regime to a worker returning to Italy after a several-year secondment in Mexico to a subsidiary, despite the presence of the same Italian employer.
In the case examined, the taxpayer had returned to Italy with managerial qualification, greater responsibilities and salary increase. The Court valued these elements, but above all reiterated that employment discontinuity does not constitute a requirement provided for in art. 16.
The same orientation emerges from numerous decisions favorable to taxpayers, including Lombardy Court of Tax Justice n. 1118/2024 Milan Court of Tax Justice n. 1938/2024, Lombardy Court of Tax Justice n. 2816/2023, Milan Court of Tax Justice n. 1479/2022 and Milan Court of Tax Justice n. 2563/2022. There is no shortage of decisions to the contrary (for example, Lombardy Court of Tax Justice second instance, n. 307/2025), however the prevailing trend tends to value the letter of the rule and the existence of substantial requirements.
Moreover, even if the employer has not prudently applied the regime to the worker returning from secondment directly in the paycheck (given the interpretive doubts raised by the Tax Authority), it remains in any case possible to request reimbursement of the higher taxes withheld in the tax return (confirmed, inter alia, by Ord. 15234/2025).
New expat tax regime: precise rules on intra-group returns
From 2024, art. 5 of Legislative Decree n. 209/2023 repealed the old art. 16 and introduced a more selective discipline. As is well known, the new regime has reduced benefits (50% exemption, 60% in case of minor children, for max €600,000 per year) and imposed stricter requirements: the worker must commit to reside fiscally in Italy for at least four years, must have been fiscally resident abroad for at least three tax periods preceding the transfer, must carry out work activity predominantly in Italy and must possess high qualification or specialization requirements.
The real novelty, for secondments and intra-group returns, is the enhanced period of foreign residence. In fact, if the worker provides activity in Italy in favor of the same subject to whom he was employed abroad before the transfer, or in favor of a subject belonging to the same group, the minimum period of stay abroad is no longer three tax periods, but six. It rises to seven tax periods if, before the transfer abroad, the worker was already employed in Italy by the same subject or by a subject of the same group.
Precisely on this profile, the Italian Tax Authority recently intervened with ruling n. 54 of 2026, on the subject of employer of record (EOR). The Administration clarified that the continuity of the relationship relevant to the extension of the minimum period of foreign residence must be assessed with regard to the formal employer — that is, the EOR — and not the actual companies using the service. It follows that, when the foreign EOR to which the worker was employed and the Italian EOR to which he is hired upon return belong to the same group, the enhanced requirement of six tax periods is triggered, even if the using companies are separate and unrelated subjects. The ruling refers, on this point, to the previous rulings issued with rulings n. 41/2025 and n. 142/2025.
How requirements change for those returning to the same group
In other words, the reform does not formally reproduce the requirement of employment discontinuity, however it addresses the issue of returns to the same employer or the same group through a standardization of access conditions: rather than remitting to the interpreter the case-by-case assessment of different degrees of relationship discontinuity, it has set a predetermined time threshold, replacing the uncertain qualitative assessment of discontinuity with a quantitative and objective requirement.
This approach should reduce the area of uncertainty typical of the old regime. However, it remains essential to precisely reconstruct the chain of employment relationships, the notion of group and the position held by the worker before expatriation, during the foreign period and upon return to Italy.
Combination with the new resident regime ex art. 24-bis of the Personal Income Tax Code
The second issue concerns the possible joint application of the new expat tax regime and the new resident regime pursuant to art. 24-bis of the Personal Income Tax Code.
Both regimes are applicable in case of transfer of residence to Italy after a period abroad, however, the new resident regime (applicable after spending at least nine of the ten preceding tax periods abroad) relieves income produced abroad, subjecting it to an annual substitute tax. The expat tax regime, on the other hand, relieves employment income produced in Italy.
In the past, art. 1, para. 154, of Law n. 232/2016 provided for incompatibility between the effects of the option for the regime ex art. 24-bis of the Personal Income Tax Code and those provided for, among others, by art. 16 of Legislative Decree n. 147/2015, namely the old expat tax regime.
The situation changed with the repeal of art. 16 by art. 5 of Legislative Decree n. 209/2023. The incompatibility rule was not coordinated with the new expat tax regime and did not contain an express reference to art. 5 of Legislative Decree n. 209/2023.
Therefore, in the absence of an express prohibition, the regime of new residents and the new expat tax regime appeared to be applicable simultaneously, provided that all the requirements provided by the respective disciplines were respected, consistently with ruling n. 16/2025 on the combination between the new expat tax regime and incentives for the return to Italy of teachers and researchers pursuant to art. 44 of Decree Law n. 78/2010.
This principle appears to have been confirmed, with specific reference to the relationship between art. 24-bis of the Personal Income Tax Code and the new expat tax regime, in an unpublished ruling, made known by specialized press, in which the Tax Authority confirmed the combination in the absence of express contrary provision.
From 2027 stop to the combination between expat tax regime and flat tax
It should be noted, however, that this application window is destined to close. In fact, art. 2 of Decree Law March 27, 2026, n. 38, converted into Law n. 88/2026, intervened on art. 1, para. 154, of Law n. 232/2016, updating the prohibition of combination already provided for the previous expat tax regime and including in it also the new regime of art. 5 of Legislative Decree n. 209/2023 for subjects transferring tax residence to Italy as of the 2027 tax period.
For transfers carried out in the tax periods 2024, 2025 and 2026, the verification of the transitional framework remains central, in which the prohibition was not yet expressly referred to the new discipline.
Considering the delicacy of the transitional framework and the absence of published general guidance on combination with art. 24-bis, as well as the subsequent legislative correction, it is advisable to proceed with caution – possibly by obtaining specific confirmation from the Tax Authority – also taking into account that, in case of dispute, it is not immediately clear what measure could in practice be disallowed (being both finalized with the same tax return).
(Article written in collaboration with Michela Filippini, Di Tanno Associati)
