In this article, co-authored with attorney Agnese Tognon of WI LEGAL Law
Firm, we examine a question that frequently arises when individuals move to
Italy on an Elective Residence Visa: what
tax obligations does this type of visa entail?
Does holding an Italian
Elective Residence Visa require an individual to file an Italian income tax
return and pay taxes in Italy? When do these
obligations arise?
Let us consider these questions in detail.
1. ITALY'S ELECTIVE RESIDENCE VISA
We have already explored the Italian Elective Residence Visa in previous articles:
Start a new life in Italy: apply for an Elective Residence Visa and get an Italian Tax break!
In short, the Elective Residence Visa is a long-stay visa (for stays exceeding 90 days) issued to US citizens and other non-EU nationals by Italian diplomatic missions and consular authorities worldwide. Applications must therefore be submitted to the Italian embassy or consulate with jurisdiction over the applicant’s place of residence.
The visa enables US citizens to enter Italy and travel within the Schengen Area, subject to the applicable entry and stay requirements.
The decision to issue an Elective Residence Visa rests with the competent consulate. This visa is generally intended for applicants who do not intend to work in Italy and can demonstrate sufficient, stable income from passive sources. Because the Italian Ministry of Foreign Affairs does not provide detailed guidance on every aspect of consular assessments, requirements and administrative practices may differ between consulates.
Applicants should therefore check the specific requirements of the Italian consulate with jurisdiction over their place of residence.
A key requirement for an Elective Residence Visa is proof of annual income of at least €31,000 from passive sources, such as:
- Private pensions or US Social Security benefits;
- Distributions from retirement accounts and pension plans, including IRAs, Roth IRAs, 401(k) and Roth 401(k) plans, and TIAA-CREF accounts;
- Royalties;
- Interest, dividends and capital gains from US brokerage accounts;
- Dividends from investments in US companies;
- Distributions from trusts;
- Rental income from properties in Italy or the United States;
- Other sources of stable income, including income arising in Italy.
Importantly, holders of an Elective Residence Visa are not authorized to work in Italy.
Travellers entering the Schengen Area are subject to border checks. Under the Entry/Exit System (EES), entry and exit information is recorded digitally, including biometric data, and passport stamps are generally replaced by electronic records.
After entering Italy, visa holders must complete further formalities to regularize their long-term stay. Although a visa may be valid for 365 days, it does not, on its own, constitute a residence permit for the entire period. Rather, it is the basis on which the holder applies for a residence permit (permesso di soggiorno), which authorizes residence in Italy.
The residence permit establishes the holder’s lawful immigration status in Italy and grants the rights associated with that status, subject to applicable restrictions, including the prohibition on employment.
2. STEPS TO OBTAIN THE RESIDENCE PERMIT
Once in Italy, applicants must complete the following steps to obtain their residence permit.
• FIRST STEP – APPLICATION THROUGH THE POST OFFICE: Applicants must submit their residence permit application through the post office within eight working days of entering Italy. Upon submission, they receive a receipt confirming that the application is pending and providing details of the appointment at the competent police immigration office (Questura). Applicants should retain the receipt as evidence of their pending application.
• SECOND STEP – APPOINTMENT AT THE IMMIGRATION OFFICE: Applicants must attend an appointment at the local Questura to provide their fingerprints. Fingerprinting is required in connection with the initial issue and subsequent renewal of a residence permit.
• THIRD STEP – COLLECTION OF THE RESIDENCE PERMIT: Applicants must return to the immigration office to collect their residence permit, an electronic card that is typically valid for one year.
3. REGISTRATION WITH THE MUNICIPAL REGISTER (ANAGRAFE)
After obtaining their residence permit, foreign nationals must register with the population register (Anagrafe) of the municipality in which they habitually reside. This procedure, known as iscrizione anagrafica, formally records their residence.
4. RENEWAL OF THE RESIDENCE PERMIT
The residence permit is generally valid for one year and may be renewed through the Questura before it expires. As with the initial application, the renewal procedure involves submitting an application through the post office. Applicants must demonstrate that they continue to meet the original eligibility requirements.
Provided the relevant requirements continue to be satisfied, the residence permit may be renewed upon expiry, allowing the holder to continue residing in Italy on a long-term basis.
When reviewing a renewal application, the authorities assess whether the applicable conditions remain satisfied. Documentary requirements may vary between immigration offices. Many Questure request evidence of residence in Italy and, where applicable, proof that the applicant has filed an Italian income tax return. Failure to comply with applicable tax or municipal registration requirements may adversely affect the renewal application.
5. THE CONCEPT OF TAX RESIDENCE IN ITALY
To understand the tax obligations of Elective Residence Visa holders, we must first consider the concept of tax residence.
We have addressed this topic in several previous articles:
The tricky concept of Tax Residence
One of the central factors is the number of days an individual spends in Italy during a calendar year, from January 1 to December 31. If the individual is present in Italy for more than 183 days, they are considered as Italian tax resident under the day-count criterion.
Consider the following example: a US citizen applies for an Elective Residence Visa and arrives in Italy on May 17, 2025.
Assume that she receives her residence permit on July 17, 2025, and registers with the Anagrafe of her municipality on August 12, 2025.
The question is: from which date should the period of presence in Italy be calculated for tax residence purposes?
Is it the date of arrival, the date on which the residence permit is issued, or the date of registration with the Anagrafe?
The answer makes a substantial difference. If the calculation begins on the date of arrival, she will have spent more than 183 days in Italy in 2025 and will therefore be considered an Italian tax resident for that tax year.
By contrast, if the calculation begins on the date of issue of the residence permit or registration with the Anagrafe, she would not meet the day-count threshold for 2025.
This distinction matters because, if she is an Italian tax resident for 2025, she must generally declare her worldwide income in Italy, including passive income from US sources, such as dividends, interest and capital gains.
If she is not an Italian tax resident for 2025, her Italian tax reporting obligations would generally concern only income arising from Italian sources, where a filing obligation applies.
For the day-count criterion, the relevant starting point is the date of physical arrival in Italy. In our example, the individual therefore qualifies as an Italian tax resident for 2025 and must generally report her worldwide income, including US-source income, for the full 2025 tax year.
The question is: from which date should the period of presence in Italy be calculated for tax residence purposes?
Is it the date of arrival, the date on which the residence permit is issued, or the date of registration with the Anagrafe?
The answer makes a substantial difference. If the calculation begins on the date of arrival, she will have spent more than 183 days in Italy in 2025 and will therefore be considered an Italian tax resident for that tax year.
By contrast, if the calculation begins on the date of issue of the residence permit or registration with the Anagrafe, she would not meet the day-count threshold for 2025.
This distinction matters because, if she is an Italian tax resident for 2025, she must generally declare her worldwide income in Italy, including passive income from US sources, such as dividends, interest and capital gains.
If she is not an Italian tax resident for 2025, her Italian tax reporting obligations would generally concern only income arising from Italian sources, where a filing obligation applies.
For the day-count criterion, the relevant starting point is the date of physical arrival in Italy. In our example, the individual therefore qualifies as an Italian tax resident for 2025 and must generally report her worldwide income, including US-source income, for the full 2025 tax year.
A few important considerations:
1) If the individual received a substantial bonus from her employer in February 2025, while she was still in the United States, that amount would generally also need to be included in her Italian tax return. Italian tax residence for 2025 is assessed by reference to the tax year as a whole, with consequences for worldwide income received during that year.
2) Because accurately tracking the number of days spent in Italy is essential, we recommend the following practical measures:
- Keep copies of flight tickets and travel records for all journeys into and out of Italy;
- Maintain a diary or spreadsheet recording each day spent in Italy and abroad;
- Remember that even part of a day spent in Italy counts as a full day. For example, if a flight to the United States departs Italy at 12:35 a.m., the 35 minutes spent in Italy that day count as one day of presence.
If, instead, the individual had first arrived in Italy on July 11, 2025, she would not meet the day-count threshold for Italian tax residence in 2025. Nevertheless, if she has moved to Italy on an Elective Residence Visa, she will need to register with the Anagrafe and would ordinarily be considered an Italian tax resident in the following year, 2026, if the relevant conditions are met.
6. ITALIAN TAX FILING BEFORE AND AFTER OBTAINING AN ELECTIVE RESIDENCE VISA AND RESIDENCE PERMIT
Having clarified these preliminary points, we can turn to a common source of confusion concerning the Elective Residence Visa.
When applying for an initial Elective Residence Visa, applicants are generally asked to submit their US tax return to the competent Italian embassy or consulate as evidence of their passive income.
At that stage, applicants who have not previously been Italian tax residents will not ordinarily have an Italian income tax return to submit. It is therefore common for the Italian authorities to request a US tax return in support of the visa application.
This distinction becomes particularly important when the residence permit issued on the basis of an Elective Residence Visa comes up for renewal. At that point, the holder must submit the documents requested by the competent Questura, including evidence of income for the preceding year.
A practical difficulty can arise because some immigration offices may not recognize that Elective Residence Visa holders who become Italian tax residents are required to file an Italian income tax return.
Consequently, an office may accept the US tax return filed by the applicant on account of their US citizenship as sufficient evidence of income.
However, the fact that a local immigration office accepts a US tax return in place of an Italian return should not be interpreted as confirmation that the individual has no Italian tax obligations. This misunderstanding can be particularly consequential for people who live in Italy on a permanent basis.
Returning to our example, the individual arrived in Italy on May 17, 2025, and qualified as an Italian tax resident for 2025. When applying for her initial Elective Residence Visa, she submitted her 2024 US tax return to the Italian embassy, as she had not been an Italian tax resident in 2024.
Now suppose she applies to renew her residence permit for 2026 and the competent office requests evidence of her income for 2025. What if she has not filed an Italian income tax return?
As explained above, she should have filed an Italian tax return declaring her income from Italian and US sources and paid any Italian taxes due.
7. CONSEQUENCES OF FAILING TO FILE AN ITALIAN TAX RETURN WHEN REQUIRED
Failing to file an Italian income tax return when required can give rise to two principal categories of consequences:
a) Immigration-related consequences.
The competent authorities may take a failure to comply with Italian tax filing obligations into account when assessing an application for renewal of a residence permit. In some cases, such non-compliance may lead to refusal of the renewal application.
b) Tax-related consequences.
From a tax perspective, it is important to distinguish between two forms of non-compliance:
- Failure to file an Italian income tax return;
- Failure to pay Italian taxes, when due.
A particularly significant distinction concerns the complete failure to file a tax return for a given year ("omessa presentazione della dichiarazione dei redditi").
This is different from filing a return that subsequently needs to be corrected: an amended return presupposes that an original return was filed.
Where no return has been filed, the taxpayer cannot simply correct the omission by amending an existing return. The Italian Revenue Agency (Agenzia delle Entrate) may impose substantial penalties for failure to file, subject to the applicable rules and any available remedies.
The key point is that individuals residing in Italy under an Elective Residence Visa must assess their Italian tax residence position carefully.
Where no return has been filed, the taxpayer cannot simply correct the omission by amending an existing return. The Italian Revenue Agency (Agenzia delle Entrate) may impose substantial penalties for failure to file, subject to the applicable rules and any available remedies.
The key point is that individuals residing in Italy under an Elective Residence Visa must assess their Italian tax residence position carefully.
As soon as they qualify as Italian tax residents, they are required to file an Italian income tax return, report their worldwide income—including income from the United States—and pay Italian taxes.
In the example, the individual who arrived with the Elective Residence Visa on 17 May 2025, is qualified as tax resident for 2025 and thus must file an Italian tax return for 2025, reporting all incomes, the Italian ones and the US ones.
If another individual would have arrived on September 14, 2025, he would become Italian tax resident in the following year, 2026, and he will have to start filing Italian tax return from year 2026.
US citizens must also consider their US tax filing obligations. When filing a US return, they generally report their worldwide income again and may be able to claim relief, including foreign tax credits for eligible Italian taxes paid, under the applicable rules. These mechanisms can help mitigate double taxation issues.
YOU MAY ALSO BE INTERESTED IN:
1) Our articles on Italian tax residence:
2) Our section dedicated to US Citizens who want to move to Italy:
CONTACT US FOR MORE INFORMATION
Enrico Povolo - Italian CPA - Vicenza
Avv. Agnese Tognon - Immigration Lawyer in Rome