In case of double taxation of the same income (between Italy and a foreign country), the individual can claim foreign tax relief for the taxes paid abroad.

The Italian tax system has implemented the “foreign tax credit” to address issues of double taxation for its residents on income earned abroad. This credit is regulated by Article 165 of the TUIR.

The relief can be claimed only when the foreign taxes become “final and settled” by filing the Italian tax return or through the Italian employer (withholding agent) during the annual balance by the month of February.

The foreign tax credit is calculated using a specific formula. If income is calculated at a reduced rate under Article 51, paragraph 8-bis, of the TUIR, the individual working abroad is entitled to a tax credit for the taxes paid there. This credit is proportional to the income determined under Article 51, paragraph 8-bis, of the TUIR. According to Italian Revenue Agency Resolution no. 48/2013, foreign taxes must be calculated based on the ratio between conventional remuneration and the employee’s income that would have been taxable under normal circumstances (according to the analytical criteria outlined in paragraphs 1 to 8 of Article 51 TUIR).

In case of double taxation of the same income (between Italy and a foreign country), the individual can claim foreign tax relief for the taxes paid abroad.

The Italian tax system has implemented the “foreign tax credit” to address issues of double taxation for its residents on income earned abroad. This credit is regulated by Article 165 of the TUIR.

The relief can be claimed only when the foreign taxes become “final and settled” by filing the Italian tax return or through the Italian employer (withholding agent) during the annual balance by the month of February.

The foreign tax credit is calculated using a specific formula. If income is calculated at a reduced rate under Article 51, paragraph 8-bis, of the TUIR, the individual working abroad is entitled to a tax credit for the taxes paid there. This credit is proportional to the income determined under Article 51, paragraph 8-bis, of the TUIR. According to Italian Revenue Agency Resolution no. 48/2013, foreign taxes must be calculated based on the ratio between conventional remuneration and the employee’s income that would have been taxable under normal circumstances (according to the analytical criteria outlined in paragraphs 1 to 8 of Article 51 TUIR).