Income from abroad: what you pay in Italy and how the returning workers regime works

Residents of Italy are taxed on income wherever it is earned. A salary from abroad must therefore be declared in Italy too, with a credit for the tax already paid in the country of work. The tool starts from gross annual income and the tax paid abroad, and shows total tax, effective rate, net income and the amount payable in Italy. For those moving back from abroad it calculates the saving under the returning workers regime and the regime for lecturers and researchers. Calculations use the 2027 rules, the year the new Consolidated Income Tax Act (Legislative Decree 117/2026) comes into force.

Cross-border commuters in Switzerland and other countries

For new cross-border commuters in Switzerland, Switzerland withholds a source tax equal to 80% of the ordinary tax and Italy applies personal income tax with a credit for what has already been paid. Old cross-border commuters, those who worked in Switzerland between 31 December 2018 and 17 July 2023, remain taxed only in Switzerland. From 2024 an allowance of €10,000 on employment income (Law 83/2023, art. 4) applies to all cross-border commuters returning daily from the border zone, not only for Switzerland.

Employees and other income from abroad

Without a daily return there is no allowance: all foreign income is subject to personal income tax, with the foreign tax credit limited to the Italian tax due on that income. The same applies to self-employment and similar income, for which employment tax credits are not considered. The exchange rate proposed is the ECB average of the last twelve months, and you can change it.

Returning workers

Those who move their residence to Italy from 2024 may qualify for the regime of art. 5 of Legislative Decree 209/2023: employment income produced in Italy, up to €600,000, counts at 50% (40% with a minor child) for five tax periods. Those who moved by 2023 fall under the previous regime, with 30% of income taxable, 10% in the southern Regions, and up to five more periods with children or a home. Lecturers and researchers have a dedicated regime with 90% of income excluded. The tool distinguishes the cases by year of return, children, home and type of income, and lists the requirements to meet.

Where the data comes from

The rules come from Law 83/2023, circular 25/E of 18 August 2023 of the Italian Revenue Agency, Legislative Decrees 209/2023 and 147/2015, Decree-Law 78/2010, Decree-Law 38/2026 and Legislative Decree 117/2026. The 2027 income tax brackets are those of the budget bill under examination in Parliament and are not yet law. All parameters are held in the firm’s data archive, with source and verification date.

Frequently asked questions

Do I have to declare in Italy a salary earned abroad?

Yes, if you are resident in Italy. Foreign income is taxed in Italy and tax paid abroad gives a credit, limited to the Italian tax due on that income.

Does an old cross-border commuter pay Italian income tax?

Not on Swiss employment income, which is taxed only in Switzerland. Other Italian income and filing obligations still need checking.

How does the returning workers regime work?

Part of the employment income produced in Italy is left out of the tax base for a limited number of years. For those moving from 2024, 50% counts, or 40% with a minor child, for five tax periods.

What are the requirements for the returning workers regime?

For the new regime: a commitment to stay in Italy for at least four years, not having been resident in the previous three tax periods, working in Italy for most of the year and having a high qualification or doing research. The tool’s result lists the requirements of the regime that applies to you.

Is the result my take-home pay?

No. It is an estimate of tax on gross income, and does not consider social contributions, family tax credits or other reliefs.