Working Remotely from Italy for a Foreign Company: Tax, Partita IVA and Social Security
You can live in Italy and work for a company abroad, but once you are an Italian tax resident, Italy taxes the income from work you physically perform on its territory. A foreign employer with no Italian presence normally does not withhold Italian tax, so you self-assess it. Whether you also need a Partita IVA depends on one thing: whether you stay an employee or become a contractor.
Scope and date. This guide states the rules in force on 17 August 2026. Italian income-tax residency follows Article 2 of the TUIR as amended by Legislative Decree 209/2023; VAT references are to Presidential Decree 633/1972, which applies through 31 December 2026 (Legislative Decree 10/2026 reorganises VAT into a new consolidated act from 1 January 2027). Figures for contributions and thresholds are the 2026 values.
Quick summary
- Presence in Italy for more than 183 days in a calendar year (184 in a leap year) makes you an Italian tax resident, whatever your employer's country. Fractions of days count.
- Italy has no split-year rule except under the treaty with Switzerland, so your arrival date changes your first-year position materially.
- As a resident you are taxed on worldwide income, and employment income is Italian-source when the work is physically performed in Italy — the client's or employer's country is irrelevant to that test.
- A foreign employer without an Italian permanent establishment or tax representative is not an Italian withholding agent: you declare the salary yourself in the Modello Redditi PF and pay IRPEF, surcharges and advances by F24.
- Employees do not need a Partita IVA. Only genuinely self-employed work does, and the trigger is habitual activity, not a euro threshold.
- If your employer converts you to a contractor, the regime forfettario is often blocked by the ex-employer rule when your previous employment income was Italian-taxable.
- Social security is a separate question from tax. For US nationals the US-Italy agreement allocates coverage by nationality, not by a posting rule: a US national in Italy working for a US employer, or self-employed, stays in US Social Security.
- One remote employee does not automatically create a permanent establishment for the foreign company, but the risk is real enough to explain why many employers prefer contractors or an Employer of Record.
Contents
The four questions that decide your position
Most confusion in this area comes from mixing four independent questions. They have different answers and different legal sources.
- Are you an Italian tax resident? Decided by facts about you, not by your contract.
- Which country taxes the income? Decided by where the work is performed and by the applicable double-tax treaty.
- Which country's social security covers you? Decided by EU coordination rules or a bilateral agreement, and it does not have to match the tax answer.
- Are you an employee or genuinely self-employed? Decided by how the work is actually organised, not by the label on the invoice.
Answer them in that order. Answering the fourth question first — "should I open a Partita IVA?" — is what leads people into an arrangement that neither they nor their employer can defend.
When Italy becomes your tax country
Under Article 2 of the TUIR, as rewritten by Article 1 of Legislative Decree 209/2023 with effect from 1 January 2024, you are resident for Italian income-tax purposes if, for most of the tax year (more than 183 days, 184 in a leap year), at least one of these applies:
- your civil-law residence is in Italy (habitual abode);
- your domicile is in Italy, now defined as the place where your principal personal and family relations are centred;
- you are physically present in Italy, counting fractions of days;
- you are registered in the resident population register (anagrafe).
Two changes matter to remote workers. First, physical presence is now an autonomous criterion: you can become resident purely by being here, with no registration and no property. Second, anagrafe registration became a rebuttable presumption instead of a conclusive test. The Revenue Agency explained the new rules in Circular 20/E of 4 November 2024, including that a fraction of a day counts as a day of presence.
Three practical consequences:
- "I stayed under 183 days so I am fine" is only sometimes true. Presence is one of four alternative tests. A person with a family home and habitual abode in Italy can be resident with fewer travel days than they expect.
- There is no split year. Italy applies residency to the whole tax period. Arriving in February and arriving in August produce completely different first-year outcomes.
- EU citizens staying more than three months must register with the municipal anagrafe under Legislative Decree 30/2007; that registration now feeds the residency presumption directly.
For the full residency analysis, including treaty tie-breakers and documentation, see our Italy tax residency guide.
Employee on a foreign payroll: who taxes what
Assume you remain an employee of a company in the United States, the United Kingdom or elsewhere, on its payroll, and you work from an apartment in Italy.
As an Italian resident you are taxed on your worldwide income under Article 3 of the TUIR. Independently of that, Article 23(1)(c) of the TUIR treats employment income as Italian-source when the work is performed in Italy. Both routes lead to the same conclusion: the salary is taxable in Italy.
The treaty does not rescue you, because it was never designed to. Under Article 15 of the Italy-US income tax convention (signed 25 August 1999, in force 16 December 2009), salaries are taxable in the state of residence unless the employment is exercised in the other state. Here the state of residence and the state where the work is exercised are the same country: Italy. The 183-day exception in Article 15(2) applies to short business trips into a country, not to someone living there. The Italy-UK convention, and the Italian domestic rules discussed by the Revenue Agency in Circular 25/E of 18 August 2023 on remote and agile work, follow the same logic: the place where the work is physically carried out drives the allocation.
Italian tax on that salary in 2026 is IRPEF at three rates, plus regional and municipal surcharges:
| Taxable income band | IRPEF rate 2026 |
|---|
| up to €28,000 | 23% |
| €28,001 – €50,000 | 33% |
| over €50,000 | 43% |
The second band fell from 35% to 33% with the 2026 Budget Law, with the benefit neutralised for total income above €200,000. Regional surcharge starts at 1.23% and can reach roughly 3.33% depending on the region; municipal surcharge runs from 0% to about 0.9%. Rates are published by the Revenue Agency on its IRPEF rates page.
Foreign tax on the same income is relieved under Article 165 of the TUIR: taxes definitively paid abroad on foreign-source income are creditable against Italian tax, capped at the proportion of Italian tax corresponding to that income.
The withholding gap nobody warns you about
Italian withholding on employment income is imposed by Article 23 of Presidential Decree 600/1973 on sostituti d'imposta — persons and entities established in Italy, or with an Italian permanent establishment. A foreign company with no Italian presence is generally not one.
The practical result surprises almost everyone:
- Nobody withholds Italian tax on your salary. Your payslip may still show US, UK or other home-country withholding, but no IRPEF, no surcharges, no INPS.
- You declare the income yourself in the Modello Redditi PF and pay the tax by F24, including advance payments for the following year.
- The cash-flow shock lands in year one. You may spend a year having foreign tax withheld at source, then face an Italian balance plus advances at the mid-year deadline, before any foreign tax credit has been settled.
- Your employer is not automatically off the hook. The absence of a withholding duty says nothing about social security, labour law or permanent establishment, which are analysed separately below.
For 2026 the ordinary personal income tax return window closes on 2 November 2026 for the 2025 tax year, because the statutory 31 October falls on a Saturday. Balance and first advance are normally due by 30 June (or 30 July with a 0.40% surcharge), and the second advance by 30 November.
If you are a US citizen or green-card holder
The United States taxes its citizens and residents on worldwide income wherever they live, and the treaty's saving clause in Article 1(2) explicitly preserves that right. So you file in both countries and use relief mechanisms rather than an exemption:
- Foreign Earned Income Exclusion (IRC §911, Form 2555): the exclusion is inflation-adjusted annually and is $132,900 for tax year 2026 under Rev. Proc. 2025-32 (see the IRS foreign earned income exclusion page), with a separate housing exclusion.
- Foreign tax credit (IRC §§901 and 904, Form 1116): usually the stronger tool once Italian effective tax exceeds the US rate, which is common at mid and upper salaries.
- The exclusion does not exclude self-employment tax. If you convert to a contractor, US SE tax exposure survives the FEIE.
- Information reporting continues: FinCEN Form 114 (FBAR) when foreign accounts exceed $10,000 in aggregate at any point, and Form 8938 above the living-abroad thresholds of $200,000 at year end or $300,000 at any time for single filers.
- Treaty-based positions generally need Form 8833.
Our dedicated guide covers the reporting side in detail: US citizens with a Partita IVA, FBAR and FATCA.
Social security: which system keeps you
Tax and social security are decided by different instruments, and they frequently point at different countries. Get this wrong and you either pay twice or accrue no pension rights at all.
EU, EEA and Switzerland employers
Regulation (EC) 883/2004 applies the lex loci laboris rule in Article 11(3)(a): you are covered where you work. Article 13 handles activity in two or more states. Since 1 July 2023 there is also a Framework Agreement on habitual cross-border telework under Article 16(1) of the Regulation; Italy joined on 28 December 2023 and it applies for Italy from 1 January 2024, as INPS explained in Messaggio 1072 of 13 March 2024.
Two conditions define its usefulness. Both the employee's state of residence and the employer's state must be signatories, and the cross-border telework in the state of residence must be less than 50% of total working time. On application, coverage can then remain in the employer's state. If you telework from Italy full time, the Framework Agreement does not help: you are outside it, and Italian coverage applies.
Where the employer has no establishment in the competent state, Article 21 of Regulation (EC) 987/2009 requires it to meet the obligations of that state's legislation, in particular paying contributions, as if it were established there. Paragraph 2 allows employer and employee to agree that the employee discharges the payment obligation on the employer's behalf, notified to the competent institution — but the employer remains the obligated party.
US employers and US nationals
The US-Italy agreement, effective 1 November 1978, is unusual. It contains no detached-worker rule. Coverage is allocated primarily by nationality, as set out in the SSA's Agreement Between The United States And Italy:
| Your situation (work performed in Italy) | Coverage and contributions |
|---|
| US national working for a US employer | United States |
| US national working for an Italian or other non-US employer | Italy |
| US national self-employed in Italy | United States |
| Italian national working in Italy for an Italian employer | Italy |
| Italian national in Italy for a US employer, resident in the US | May elect either system |
| Dual US/Italian national in covered work in Italy | May elect either system |
| Third-country national, any employer | Italy |
Three points follow, and they are routinely misreported in expat forums:
- A US citizen who stays on a US payroll while living in Italy normally remains in US Social Security and Medicare, and the employer requests a certificate of coverage (form USA/IT 4) from SSA to evidence exemption from Italian contributions. "US employer" is defined in the agreement and includes US corporations and certain affiliates covered by an IRC §3121(l) agreement.
- A US citizen who becomes self-employed in Italy is also assigned US coverage under the same nationality rule, and must attach a copy of the certificate of coverage to the US tax return each year. That is the opposite of the assumption that a Partita IVA automatically means Italian INPS contributions.
- An election is available to Italian nationals and dual nationals, but it must be made within three months from the start of the work, and for dual nationals it is final for that job.
Two cautions. The agreement's material scope for Italy is compulsory general insurance for old age, disability and survivors; contributions outside that scope are not automatically eliminated by a certificate of coverage, and a case-by-case check is needed. And it does not extend Medicare entitlement to Italian credits, which is why healthcare has to be planned separately.
If Italian contributions are due
Where Italian coverage applies and the employer has no Italian entity, the employer must still open an INPS employer position and normally acts through an Italian social-security representative under a formal mandate. Rates for 2026, for a private-sector employee, start from the general IVS contribution of 33% of gross pay — 9.19% on the employee and 23.81% on the employer — with sector items on top depending on the applicable national collective agreement, plus INAIL accident insurance. INPS set the 2026 daily minimum pay at €58.13 and the annual contribution ceiling for workers first insured after 1995 at €122,295 in Circolare 6 of 30 January 2026.
Our employer-side guide covers registration and payroll mechanics: Italian social security (INPS) for foreign employers.
Do you need a Partita IVA?
If you remain an employee, no. Employment income is declared in the tax return; there is no VAT number, no invoicing and no Gestione Separata registration for that income.
If you become self-employed, the trigger is set by Article 5 of Presidential Decree 633/1972: habitual, professional exercise of an activity, even if not exclusive. There is no revenue threshold that switches the obligation on. Two myths deserve to be retired:
- "Under €5,000 I can invoice as occasional work." The €5,000 figure comes from Article 44 of Decree-Law 269/2003 and is the threshold above which occasional self-employment income attracts INPS Gestione Separata contributions. It is not a VAT-number threshold, and it says nothing about habituality.
- "Occasional work covers my full-time remote role." Occasional self-employment under Article 67(1)(l) of the TUIR is episodic and unorganised. A continuous, full-time engagement for a single client is habitual by definition, and treating it as occasional is not defensible.
Opening the number is administratively simple: request a codice fiscale if you do not have one, file form AA9/12 with the Revenue Agency (online or by PEC) within 30 days of starting the activity under Article 35 of Presidential Decree 633/1972, at no cost, and enrol in INPS Gestione Separata if no professional pension fund applies. Pure professionals do not register with the Chamber of Commerce; business activities do, through the ComUnica procedure. The full walkthrough is in our Partita IVA guide for foreigners.
Real autonomy versus false self-employment
This is the section your employer's counsel cares about most, and the one expat guides skip.
Italian law does not accept a label. Subordinate employment under Article 2094 of the Civil Code turns on etero-direzione: working under the direction of the employer. Article 2 of Legislative Decree 81/2015, as amended by Decree-Law 101/2019, goes further and applies the discipline of subordinate employment to collaborations that are predominantly personal, continuous and organised by the principal, even without full direction. The Labour Inspectorate set out its approach in Circolare INL 7 of 30 October 2020, and the Court of Cassation has repeatedly reclassified arrangements where autonomy existed only on paper.
Indicators that an "independent contractor" is in fact an employee:
| Indicator | Why it matters |
|---|
| Fixed hours or required availability windows | Classic sign of direction, not coordination |
| A single client, the former employer | Mono-committenza removes economic independence |
| Monthly fixed fee equal to the old salary | No business risk, no pricing autonomy |
| Tools, laptop, accounts and software supplied by the company | The organisation is the principal's, not yours |
| Same team, same manager, same tasks as before | Only the paperwork changed |
| No right to refuse work or to subcontract | No entrepreneurial discretion |
A foreign governing-law clause does not protect the arrangement. Under Article 8 of the Rome I Regulation (EC) 593/2008, an employment contract is governed by the law of the country where the employee habitually works, and a choice of another law cannot deprive the worker of the mandatory protections of that country.
If an inspection reclassifies the relationship, exposure falls on both sides:
- recovery of all omitted INPS contributions and INAIL premiums;
- civil penalties on the omitted contributions, capped at 40% under Article 116(8)(a) of Law 388/2000;
- the maxi-sanzione for undeclared work under Article 3 of Decree-Law 12/2002, from €1,500 to €12,000 per irregular worker plus €150 for each day actually worked, reduced where the worker is regularised;
- for the worker, loss of the flat-tax regime and reassessment of income as employment income — alongside, it should be said, the acquisition of employee protections including severance and dismissal rules.
Enforcement against a company with no Italian assets is harder in practice, but the legal exposure is real, and the worker is the party physically present in Italy.
The regime forfettario ex-employer trap
The regime forfettario is the reason most conversions look attractive: a flat substitute tax on a lump-sum percentage of revenue. For 2026 the core parameters are unchanged.
| Parameter | 2026 value |
|---|
| Revenue ceiling | €85,000 |
| Immediate exit during the year | above €100,000 |
| Standard substitute tax | 15% |
| Start-up rate, first five years | 5% |
| Profitability coefficient, professional services | 78% |
| Profitability coefficient, IT development and consulting | 67% |
| Prior-year employment income exclusion | above €35,000 |
| INPS Gestione Separata, professionals with no other cover | 26.07% |
The Gestione Separata rate, the €18,808 minimum and the €122,295 ceiling for 2026 are in INPS Circolare 8 of 3 February 2026.
Now the trap. Article 1(57)(d-bis) of Law 190/2014 excludes the regime for taxpayers whose activity is carried out predominantly — more than 50% of revenue — towards employers with whom an employment relationship is in place, or existed in the two preceding tax years, or towards parties related to them. The provision exists precisely to stop artificial conversions of employment into invoicing, as the Revenue Agency explained in Circular 9/E of 10 April 2019.
There is one widely over-read exception. In Ruling 50/2024 of 22 February 2024 the Revenue Agency allowed a taxpayer who had ended employment with a foreign employer, then moved to Italy and started invoicing that same former employer, to use the forfettario: the earlier employment income had been earned abroad and was not taxable in Italy, so neither the d-bis rule nor the employment-income cap was triggered.
Read the fact pattern carefully before relying on it:
- the taxpayer was resident abroad while employed, and the employment income was foreign income;
- the employment relationship had already ended in a previous tax year.
If instead you were already living in Italy and performing the work from Italy while on the foreign payroll, that employment income was Italian-source, and the rationale of Ruling 50/2024 does not transfer. The conservative professional reading is that d-bis applies to that conversion, which is the exact artificial transformation the rule targets. There is no published ruling squarely on this fact pattern, so this is an area to document and get advice on rather than assume.
Two more limits are frequently missed:
- The 5% start-up rate under Article 1(65) requires that the new activity is not a mere continuation of previously performed employment. Doing the same job for the same company with an invoice instead of a payslip is a mere continuation, so the 5% rate is generally unavailable even where the 15% regime is.
- The €35,000 prior-year employment income cap in Article 1(57)(d-ter) is irrelevant once the employment ended in the previous year, but it does bite when you keep a part-time job.
Details, coefficients and worked calculations are in our regime forfettario guide for foreigners, and the structural comparison is in freelance, employee or SRL.
Regime impatriati if you keep the same employer
Moving to Italy while keeping your foreign employer can qualify for the inbound worker regime under Article 5 of Legislative Decree 209/2023: 50% of eligible Italian employment or self-employment income is exempt, rising to 60% with a minor child, capped at €600,000 of income per year, for five tax periods.
The conditions that matter for this scenario:
- you must not have been resident in Italy in the three previous tax periods;
- that period extends to six years if you come to work in Italy for the same foreign employer or group you worked for abroad, and to seven years if you had previously worked in Italy for that same employer or group;
- you must commit to remaining tax resident in Italy for four further years;
- the work must be performed mainly in Italy, and you must meet the high-qualification requirements.
The six and seven-year extensions are the reason many "keep my job, move to Italy" plans fail the eligibility test. Group means control under Article 2359 of the Civil Code, not a loose commercial relationship. For income above the forfettario ceiling, see our worked analysis in regime impatriati for high-earning US and UK remote workers.
Invoicing a foreign company from Italy
Once you have a Partita IVA and your client is a business abroad, the mechanics are specific:
- Place of supply. Under Article 7-ter of Presidential Decree 633/1972, generic services to a non-Italian business customer are located where the customer is established, so no Italian VAT applies. The invoice carries the wording operazione non soggetta ad IVA ai sensi dell'art. 7-ter DPR 633/1972, with nature code N2.1 in the XML.
- Electronic invoicing. Cross-border transaction data go through the SdI in FatturaPA XML format; the quarterly esterometro filing was abolished from 1 July 2022 by Article 1(3-bis) of Legislative Decree 127/2015, as confirmed by Circular 26/E of 13 July 2022. The conventional recipient code for a foreign customer is
XXXXXXX.
- The customer still needs a readable copy.
XXXXXXX means SdI does not deliver anything abroad, so send a PDF through the agreed channel.
- Deadline. An immediate invoice must be issued within 12 days of the transaction date under Article 21 of Presidential Decree 633/1972; cross-border data follow the invoicing deadlines. Timing rules for services are covered in our invoice timing guide.
- Stamp duty. A €2 imposta di bollo applies to invoices issued without VAT for amounts above €77.47 under the Tariff annexed to Presidential Decree 642/1972, paid quarterly by F24 with codes 2521 to 2524. Specific exemptions exist, mainly for exports and intra-EU supplies of goods, so check your case rather than generalising.
- No Italian withholding by the client. A non-resident customer is not an Italian withholding agent, and a forfettario taxpayer is exempt from withholding anyway under Article 1(67) of Law 190/2014, with the standard declaration on the invoice.
- US clients and Form W-8BEN. An individual contractor files W-8BEN, not W-8BEN-E, to avoid the 30% US withholding on US-source payments; the treaty article for independent personal services supports the claim, and the client may ask for a certificate of tax residence, which the Revenue Agency issues free of charge.
- Currency and monitoring. Foreign-currency amounts are converted under Article 13(4) of Presidential Decree 633/1972, and a foreign account may trigger quadro RW monitoring above €15,000 peak value and IVAFE above a €5,000 average balance.
What the foreign employer is actually worried about
When an employer says "we cannot have you as an employee in Italy", the real concerns are usually these three, in order.
Permanent establishment
Under Article 162 of the TUIR and Article 5 of the OECD Model, two independent routes exist: a fixed place of business at the disposal of the enterprise through which business is carried on, and a dependent agent who habitually concludes contracts, or negotiates their essential elements, in Italy.
A single employee working from their own home is generally not a permanent establishment. The OECD Commentary is explicit that a home does not become at the enterprise's disposal merely because an employee works there, and the Revenue Agency's Circular 25/E/2023 requires a case-by-case assessment of disposal, spatial and temporal fixity, and whether business is carried on through the place. Risk rises sharply when the employer requires the home to be used or pays for premises, when the activity is core rather than auxiliary, or when the person in Italy habitually closes deals. Note that Article 162(6) of the TUIR is drafted more broadly than the treaty rule, so the domestic analysis can be less forgiving.
If a permanent establishment exists, exposure includes IRES at 24% and IRAP at 3.9% on attributed profits, Italian bookkeeping and VAT registration, transfer-pricing attribution, administrative penalties of 120% to 240% of the tax for an omitted return, and criminal exposure under Article 5 of Legislative Decree 74/2000 where evaded tax exceeds €50,000 per tax per year.
A VAT fixed establishment is a separate test under Article 11 of EU Implementing Regulation 282/2011, requiring sufficient permanence and a suitable structure of human and technical resources. The CJEU set a high bar in Titanium (C-931/19), Berlin Chemie (C-333/20) and Cabot Plastics (C-232/22), so a single home-based employee rarely creates one — but the two analyses must be run separately.
Labour law and compliance
Independently of any permanent establishment, work performed in Italy attracts Italian mandatory protections through Article 8 of Rome I. Practical duties that catch employers out include the written information on working conditions under Legislative Decree 152/1997 as amended by Legislative Decree 104/2022, health and safety duties under Legislative Decree 81/2008 that continue to apply to remote work, and the telematic notification of agile-work agreements to the Ministry of Labour under Article 23 of Law 81/2017, due within five days of the start.
Using an Employer of Record
An EOR can be a clean solution, and it is also regulated. Supplying labour to a third party is reserved to agencies authorised by the Ministry of Labour; unauthorised supply, and arrangements where the client exercises the real managerial power while the provider is merely administrative, expose the parties to sanctions under Article 18 of Legislative Decree 276/2003, including the fraudulent-supply offence reinforced by Decree-Law 19/2024. Market pricing typically adds 15% to 25% to gross salary, which is a commercial estimate rather than a regulated figure. The alternatives — a branch or an Italian SRL — are compared in our guide to hiring employees in Italy as a foreign company.
Immigration: who may legally do this
- EU, EEA and Swiss citizens need no permit. They register with the municipal anagrafe after three months, obtain a codice fiscale, and the tax and social security analysis above applies unchanged.
- Non-EU citizens cannot simply work remotely from Italy on a tourist stay: work is not permitted on a Schengen short-stay visa, whoever pays you and wherever the client sits.
- The compliant route is the digital nomad and remote worker permit created by Article 6-quinquies of Decree-Law 4/2022, converted by Law 25/2022, and implemented by the interministerial decree of 29 February 2024, published in Gazzetta Ufficiale no. 79 of 4 April 2024. It sits outside the Decreto Flussi quotas and covers both self-employed nomads and remote employees of a foreign employer.
- Requirements include high qualification, private health insurance for the stay, suitable accommodation, at least six months of prior experience in the activity, and an annual income of at least three times the minimum level for exemption from healthcare cost-sharing. With the national exemption parameter of €8,263.31, that formula gives roughly €24,790 for a single applicant; consulates apply the formula and may require more, so confirm the current figure with the consulate handling your file.
- The permit lasts up to one year and is renewable while the conditions persist. Our detailed walkthrough is the Italy digital nomad visa guide; treat the statutory formula above as the reference for the income test.
The permit solves immigration. It grants no special tax regime: residency, IRPEF and contributions follow the ordinary rules described in this guide.
Two worked examples with numbers
Both examples assume an Italian tax resident, full-year presence in Italy, work performed entirely from Italy, and no impatriati eligibility. They ignore personal deductions and credits, which are limited at these income levels, and they are illustrative rather than a substitute for a calculation on your figures.
Example 1: employee who stays on the US payroll
An American engineer earning €90,000 gross keeps her US employment contract.
| Item | Amount |
|---|
| IRPEF: 23% on €28,000 | €6,440 |
| IRPEF: 33% on €22,000 | €7,260 |
| IRPEF: 43% on €40,000 | €17,200 |
| IRPEF total | €30,900 |
| Regional and municipal surcharges, about 2% | €1,827 |
| Italian tax | €32,727 |
No Italian tax is withheld, so she declares the salary and pays the balance plus advances herself. Because she is a US national with a US employer, US Social Security and Medicare continue and her employer requests the certificate of coverage; no Italian INPS contributions arise on that basis. US federal income tax on the same salary is then reduced or eliminated by the foreign tax credit, and she still files FBAR and, if applicable, Form 8938.
Example 2: converted to contractor, invoicing €80,000
The same person is asked to invoice instead, at €80,000 per year, using the professional coefficient of 78%.
| Scenario | Calculation | Total Italian burden |
|---|
| Forfettario 15%, Italian INPS applies | Income €62,400; contributions 26.07% = €16,268; tax base €46,132; tax 15% = €6,920 | €23,188 (29% of revenue) |
| Forfettario 15%, US coverage under the nationality rule | Contributions to INPS not due; Italian tax 15% on €62,400 | €9,360 Italian tax, plus US self-employment tax |
| Ordinary regime, costs €8,000, Italian INPS applies | Income €72,000; contributions €18,770 deducted; IRPEF plus surcharges on €53,230 | about €34,900 (44% of revenue) |
Three warnings on this table. First, the forfettario is only available if the ex-employer exclusion does not apply — and where your previous employment income was Italian-source, the conservative reading is that it does, which pushes you into the third row. Second, whether US self-employment taxes can be deducted against the Italian forfettario base is not settled and should not be assumed. Third, the third row is the honest comparison for many conversions, and it is worse than the employee position once you add the loss of severance, paid leave, sick pay and unemployment cover.
That last point is the one to raise with your employer. A contractor rate equal to your old gross salary is a pay cut, not a lateral move.
Practical checklist
- Count your days and map your ties before the calendar year turns; residency is decided per tax period with no split year.
- Register with the anagrafe if you are staying, and obtain a codice fiscale.
- Confirm your immigration basis: free movement, a work permit, or the digital nomad and remote worker permit.
- Decide employee or contractor honestly, against the Article 2094 and Article 2 indicators, not against the invoice you would like to issue.
- Fix the social security position in writing: A1 certificate, Framework Agreement application, or a US certificate of coverage before the work starts.
- Tell your employer they are probably not a withholding agent, and plan your own IRPEF cash flow, including advances.
- If you convert, test the forfettario exclusions first: the 50% ex-employer rule, the mere-continuation limit on the 5% rate, and the €35,000 employment-income cap.
- Check impatriati eligibility early, including the six or seven-year prior-residence rule for the same employer or group.
- Set up invoicing properly: SdI transmission,
XXXXXXX, PDF copy to the client, stamp duty, W-8BEN.
- Document the employer's position on permanent establishment and, where relevant, the agile-work notification.
- Keep the evidence: contracts, presence records, certificates of coverage, foreign withholding statements and payment records.
Frequently asked questions
Can I be an employee of a US company and work from Italy?
Yes, and you do not need to become a contractor to do it legally. You will be an Italian tax resident once the residency tests are met, Italy will tax the salary because the work is performed here, and your employer will have social security, labour-law and permanent-establishment questions to resolve, but the employment relationship itself can continue.
If I stay under 183 days, am I safe from Italian tax?
Not necessarily. Presence for more than 183 days is only one of four alternative tests in Article 2 of the TUIR. Habitual abode, domicile understood as your centre of personal and family relations, and anagrafe registration each independently make you resident, and fractions of days count towards the presence test.
Do I need a Partita IVA to work remotely from Italy?
Only if you are genuinely self-employed. Employees declare employment income in the tax return without a VAT number. If you invoice, the obligation follows habitual activity under Article 5 of Presidential Decree 633/1972, with no minimum revenue; the €5,000 figure people cite is the INPS threshold for occasional work, not a VAT-number threshold.
Can I use the regime forfettario as a remote employee?
No. The forfettario applies to self-employment and business income, not to employment income. A salaried remote worker cannot use it on the salary, and prior-year employment income above €35,000 can also block access to the regime for a separate activity.
My employer wants to switch me from employee to contractor. Is that allowed?
Only if the substance changes. If you keep fixed hours, a single client, company tools and the same reporting line, Italian law can treat the relationship as subordinate employment under Article 2094 of the Civil Code or apply the subordinate discipline under Article 2 of Legislative Decree 81/2015, with contribution recovery, civil penalties up to 40% and the undeclared-work sanction of €1,500 to €12,000 plus €150 per day worked.
Almost never at 5%, because doing the same work for the same company is a mere continuation of the prior employment, which excludes the start-up rate. The 15% regime is also at risk where more than 50% of your revenue comes from an employer of the current or two preceding tax years; Ruling 50/2024 only helped a taxpayer whose earlier employment income had been earned abroad and was not taxable in Italy.
Will I owe US Social Security and Medicare while working from Italy?
If you are a US national working in Italy for a US employer, or self-employed in Italy, the US-Italy agreement assigns coverage to the United States, so US contributions continue and Italian contributions on the covered branches do not apply, evidenced by a certificate of coverage. Italian nationals and dual nationals can elect between the systems within three months of starting the work.
Who withholds Italian tax on my foreign salary?
Usually nobody. A foreign employer without an Italian permanent establishment is not a withholding agent under Article 23 of Presidential Decree 600/1973, so you report the income in the Modello Redditi PF and pay IRPEF, surcharges and advance payments by F24 yourself.
Does one remote worker create a permanent establishment for my employer?
Not automatically. It requires either a fixed place at the enterprise's disposal through which the business is carried on, or a person who habitually concludes contracts for it. The risk increases where the employer requires or funds the Italian workplace, where the role is core to the business, or where you negotiate and sign deals from Italy.
Do I need an Employer of Record?
It is one compliant option among several, alongside a branch, an Italian subsidiary and genuine self-employment. Labour supply in Italy is reserved to authorised agencies, so the provider must be properly authorised and must genuinely act as employer; a payroll-only arrangement where your foreign company still directs the work carries reclassification risk.
Which country pays for my healthcare?
Registration with the Italian national health service follows your residence and status. If you remain covered by another EU or EEA state's system, an S1 document may apply; if you are covered by a non-EU system such as US Social Security, that coverage does not give Italian healthcare entitlement, and enrolment or private insurance must be arranged separately. Non-EU permit holders should check the enrolment route attached to their permit type.
Official and primary sources
Final note
Working from Italy for a foreign company is legal, common and manageable. The failures happen for two reasons: people assume that keeping a foreign payroll keeps the tax abroad, and they assume that a Partita IVA is a neutral administrative change rather than a reclassification of the whole relationship.
Sort out residency, the taxing country, the social security certificate and the true nature of the work — in that order, before the move if possible. If your employer proposes a contractor arrangement, price the loss of employment protections and test the forfettario exclusions on your actual facts before agreeing.
Reviewed on 17 August 2026. This article provides general information and does not replace advice based on your contract, residency facts and tax regime.
Giovanni Emmi|August 17, 2026
