Requirements for Contracting in Italy

30th November 2021

With EU citizens able to move more freely following COVID vaccination rollouts, international contractors can take up more full time or project roles. In this blog post, we focus our attention on a G7 country and Europe’s fourth largest economy: Italy.

While the culture, climate and cuisine are big selling points, we dig deeper to find out what it’s really like to work in Italy. What do contractors need to know about work visas and Italian tax requirements? And what are the latest travel restrictions when entering or leaving the country?

Contracting in Italy

The first bit of good news, as highlighted on European news publisher The Local’s dedicated Italian website, is that EU citizens, including nationals from Norway, Iceland, Liechtenstein and Switzerland, do not need any kind of work permit to ply their trade in Italy. You will however need to apply for a residence permit should you decide to stay for more than 90 days or three months. Citizens who live in Italy but are being paid by a company based in another country, don’t have to worry about obtaining a visa or work permit, which can be time consuming.

Those from countries outside the EU will be subject to the 90-day rule, which means they can remain for a maximum of three months at a time but for any longer period, a work visa is required. Given the cap on the number of foreign workers allowed, known as the ‘decreto flussi’, obtaining a self-employment visa for non-EU nationals can prove difficult – proof of accommodation, police checks and funds of €8,500 are needed. Those looking to establish themselves in Italy then need to obtain a residence permit or ‘permesso di soggiorno’ within eight days, which is valid for two years.

British workers who resided in Italy before 31st December 2020 are covered by the Post-Brexit Withdrawal Agreement but still need a residence permit to continue working and living in Italy. But as per the above, those looking to work remotely can only do so for 90 days, after which they have to apply for a work visa. To find out what type of visa you may need, you can visit the Italian Ministry of Foreign Affairs portal. After five years, non-EU citizens can apply for a long-term residence permit.

And what about personal taxation? Italian residents and employees pay income tax known as ‘Irpef’ which is levied at a lower rate of 23% with the upper higher rate threshold of 43% for those earning in excess of €75K. Employers as well as employees must also pay social security contributions. Contractors in particular must ensure they file their tax returns correctly and check whether there are any tax breaks available to them as new residents. Remaining compliant and paying the right amount of income tax and national insurance contributions must be a priority. Rest assured, though, that Italy’s inland revenue service or ‘Agenzia delle Entrate’ has bilateral agreements to ensure that double taxation is avoided.

Latest travel news for contractors in Italy

As far as restrictions affecting travel to and from Italy, reports that three more regions in Italy – Basilicata, Lombardy and Piedmont – have been added to Spain’s high risk list. All travellers from these regions must either present proof of vaccination, a recovery certificate or negative test. They must also complete a Health Control Form. Latvia, one of the most infected EU countries, has placed Italy on its green list, allowing travellers restriction-free access to the Baltic state.

Italians and Vatican City residents who haven’t had their vaccines or haven’t recovered from the virus have also now been removed from Cyprus’s safe travel list and added to the island’s medium risk or orange category of countries. Italian authorities have now decided to let visitors from Brazil, India, Bangladesh and Sri Lanka enter the country but the permission is only for ‘essential purposes’, which covers work, health or education reasons. All visitors must fill in a digital passenger locator form. Of course, with the latest Covid restrictions being constantly updated as concerns grow around increasing case numbers, it is crucial to check the latest updates before you commit to any travel.

Compliance a must

There are many factors to weigh up before deciding to uproot and move to another country for work. As highlighted above, for contractors looking for new opportunities in Italy, first and foremost you must find out whether you need a work visa and the type of documents you need before then applying for a resident’s permit. You must of course make sure that if you decide to settle that you are legally compliant and aware of your tax return obligations. If you’re thinking of contracting in Italy and want to know more about Italian tax and compliance, talk to our 6CATS International experts.

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