It's a matter of fact...not choice

It seems evident that Brexit will now have a have a serious impact on a number of we Brits living in Italy.  As I travel and speak with people around Italy, I often hear the story that there are a considerable amount of people in areas who are, and have been, living in Italy for more than 183 days per annum, and been doing that for a long time but have never registered as resident. The motivation seems to be tax and simplification, in the main.  It is apparent that the said individuals are taking advantage of the freedom of movement EU directive and the fact that their movements into and out of the country are not tracked (that is not quite true because we are registered, just not tracked...yet.) This allows someone to live in Italy but not actually register a presence after 3 months.  In most cases you can own property in Italy as well but declare and pay tax in the UK.  Clearly this is living under the radar but a practice that I am told is common place.  If this is you, Brexit will have a large impact on you because without an established residency in Italy before Brexit (and that is no guarantee in a NO-deal scenario) your status will revert to one of third country national post March 29th 2019. This means that you will have to do one of 3 things post Brexit:  1.   Become resident in Italy before Brexit and by default assume tax residency as well. A financial planning exercise before taking that action is WELL advised!  2.   Revert to 'third country national' status post Brexit and apply for a 'Permesso di Soggiorno' at the comune each year. Obviously the usual criteria will likely apply such as being able to prove financial independence or gainful employment in Italy and possibly evidence that you will not be a burden on the healthcare system i.e. health insurance. This will allow the right to stay in the country up to 183 days per annum without tax residence in Italy. Unlike freedom of movement which British people currently enjoy, under 'third country national' status movements will be closely tracked and there are a few points to consider as follows:   The calculation of the 183 days does not just take into account the consecutive days spent in Italy but also any physical presence in Italy including: * part days spent on Italian territory * The day of arrival and the day of departure * Saturdays and Sundays * Any holidays taken during the period of stay in Italy * If you are working in Italy, and take a work break, these days are included.  3.   Apply for a 'Permesso di Soggiorno' each year to stay over 183 days (assuming you meet the criteria) and be welcomed into the Italian tax resident world.

We recall the words of Benjamin Franklin who once said: An ounce of prevention is worth a pound of cure.

With this in mind I thought it would be worth revisiting the current definition of residency as defined by the Italian Income Tax code of residency and why one should be registered as resident in any event, if you are living for more than 183 days per annum in the country.  (If one was ever in doubt as to the fiscal obligations of remaining in Italy, the fact that residency is defined in the Italian 'Income Tax' Code should be a big giveaway.) Here are the facts as determined by Section 2 of the Italian Income Tax Code: An individual is considered resident for tax purposes in Italy if, *  you spend most of the calendar year (183+ days) in the Italian state *  are registered with the Resident Population Registry (Anagrafe) *  have your residence or your domicile in the territory of the Italian State, as defined by Section 43 of the Italian Civil code.  And according to Section 43 of the Italian Civil code: * Your place of residence is the place where you, the individual, have your habitual abode * Your place of domicile is your principal place of business and social/family interests Employment income is considered ”produced” in Italy if the work activity (i.e. business) is performed on Italian territory. (That also means internet activity that is carried out in Italy even if the focus of the internet activity is in another country.) The better way is to plan your way around your residency and your respective tax authorities. Make sure you get your residency options right first time. Talk to the people who understand these issues and plan carefully in advance of taking residency in Italy or elsewhere, to ensure that you take advantage of the tax breaks available to you.  Failing to do so can create burdensome Italian administrative headaches after the event that might be difficult to unwind.