Remote Work in Italy: New Tax Clarifications for 2026

For Dutch companies with a distributed workforce, Italy has always been a top destination. However, the “Impatriati” tax regime (the Italian incentive for inbound workers) has recently undergone significant changes. New rulings from the Italian Tax Authorities (January 2026) have finally provided much-needed clarity on two critical scenarios: remote working and employment continuity.

Remote Work for Foreign Employers

A common question for HR managers in the Netherlands is whether an employee moving to Italy can still benefit from tax incentives while remaining on a non-Italian payroll.

The authorities have confirmed that yes, the regime applies even if the employer is based outside of Italy. The “source” of the income is determined by where the work is physically performed. As long as the employee is working in Italy for more than 183 days a year, they may qualify for the 50% tax reduction, regardless of the employer’s location.

The “7-Year Rule” for Internal Transfers

For companies looking to relocate existing talent from the Netherlands to a local Italian branch (or allowing them to keep their current contract while moving), there is a specific catch regarding continuity:

• Standard Requirement: Normally, an individual must have lived abroad for 3 years to qualify.
• Continuity Rule: If the worker continues to work for the same employer (or the same corporate group) after moving to Italy, the required period of previous foreign residence increases to 7 years.

This distinction is vital for long-term workforce planning and ensuring that your international mobility policy remains compliant and cost-effective.

Compliance Note: While these rules offer great opportunities for talent retention, they also bring frictions in payroll and social security. Dutch employers should help their employees face these cross-border challenges, ensuring a smooth transition for their team.

Impact on 2026 Relocations

Unlike the previous framework, the current regime (Legislative Decree No. 209/2023) no longer requires a “functional link” between the move and a new job. This makes it significantly easier for remote workers and digital nomads to settle in Italy legally and benefit from the incentive, provided they meet the high-qualification criteria.