In the previous articles we discussed what levies, due to having tax residence in Italy, a person is obliged to pay when making a real estate investment abroad.

First of all, distinctions must be made between the different aspects of residence, which are often the cause of confusion and misinterpretation.

Questions :

Aiding this by answering the following questions can help us to clarify. What is the difference between civil residence and tax residence? Who is considered to be resident for tax purposes in Italy? When someone is no longer considered to be resident for tax purposes in Italy?

Answers:

The definition of civil residence is found in Article 43 paragraph 2 of the Civil Code. In fact, it defines residence as the place where the person has his habitual abode.

In order to give a broader explanation, we must analyse the first paragraph of the same article.

In the first paragraph of Article 43, we find the definition of domicile. Domicile means the place where the person has established the seat of his business and interests. Thus, domicile represents the seat of the person’s economic activities, whereas residence corresponds to the person’s home. Indeed, residence does not always correspond with domicile.

According to the principle of World Wide Taxation, persons registered in the register of resident population must be and are in any case considered to be tax residents in Italy and therefore taxable persons for income produced in Italy and abroad.

To answer the question, when a person no longer has tax residence in Italy, the law provides for a procedure: i.e. registration in the register of Italians resident abroad (A.I.R.E.).

When one moves to a foreign country with one’s residence and domicile attached, in order not to be considered resident in Italy, one must register with the A.I.R.E. using an on-line procedure.

Failure to register, and therefore not being removed from the register of residents, entails the obligation to declare one’s income in Italy. This procedure, however, runs the risk of infringing the principle of contributory capacity laid down in Article 53 of the Italian Constitution, but we will discuss this aspect later.

Annotation:

On this point, however, a clarification is in order; if a person emigrates abroad and registers with the A.I.R.E. in a country or territory with a favourable tax regime, in accordance with the Ministerial Decree of 4 May 1999 and its subsequent amendments and additions, he is ALWAYS considered resident in Italy.

Next we will specifically analyse the convention converted into law n. 329 of 31-12-1990 stipulated between Italy and the United Kingdom to avoid double taxation.

The list of countries considered to have a favourable tax regime can be consulted at: https://www.agenziaentrate.gov.it/.

The AIRE registration procedure can be consulted at : https://www.esteri.it/mae/it/servizi/italiani-all-estero/aire_0.html

Here is Brexit, and there is finally an end to an issue that has been in the news for over four years.

In fact, on 12/24/2020 the agreement was found that regulates trade relations between the two blocs as of 1/1/2021. Over the course of these years, there has been much speculation on the subject, predicting doomsday scenarios that have not come true.

Changes:

The agreement reached between the parties, regulates several aspects in the relations, among the most important points we find :

(a) Free trade between the EU and the UK without any application of duty;

(b) Free movement of capital without some restrictions;

(c) End of free movement of people.

Basically nothing changes for the first two points; while there is a change for point C.

In fact, from January 1, 2021, those who want to travel to the UK to work or study will have to apply for a visa. In the case of a work visa, a point system has been introduced that takes into consideration several factors including : education, work experience, English language skills, job offer, and age.

What are now the prospects for the UK after Brexit? What strategies will be adopted to position itself as an autonomous entity in the international market?

To date, the UK has already concluded trade agreements that will take effect from 1/01 with 90 countries.

Data :

The table below shows, that for the year 2019 (latest available data), the UK exports 57 % to non-EU countries and 47 % to the EU itself, respectively. Opposite numbers for imports, in fact the European Union is the largest exporter to the UK. That is why the agreement between the two blocs was almost a foregone conclusion!

In light of the above data, leaving the European Union represents greater freedom of movement in terms of concluding free trade agreements.

The strategies in place, of the government led by Prime Minister Boris Johnson, are to legislate a series of measures aimed at, the attraction of foreign investor to the UK.

At the end of this whole process, there has been neither the collapse of the pound nor the total relocation to Continental Europe of the major global players present in London, to which cities such as Paris and Frankfurt had hoped to see.

The full text of the agreement with the European Union can be found at : http://www.gov.uk