NEWSLETTER PAYROLL MAY 2024

Entry and Residence Conditions in EU Member States for Foreigners

The Legislative Decree No. 152 of October 18, 2023 (Official Gazette No. 256 of November 2, 2023), transposing Directive 2021/1883/EU on the conditions of entry and residence of third-country nationals intending to carry out highly skilled work in a EU Member State (so-called EU Blue Card), has amended Article 27-quater of the Consolidated Immigration Act (Legislative Decree No. 286/1998).

Circular No. 2829 of March 28, 2024, jointly adopted by the Ministry of Labour and Social Policies and the Ministry of the Interior, has thus provided operational instructions to the territorial offices involved in managing the entry of third-country nationals into Italy for highly skilled work purposes and guidance on the procedure to follow for submitting applications to the single immigration desks by the employer.

The main innovations provided by Article 27-quater concern the expansion of the workforce eligible to enter Italy through this channel (including, among others, foreigners already residing in Italy as seasonal workers and beneficiaries of international protection) and less stringent requirements for the qualifications requested (not only a tertiary-level higher education degree, but alternatively, also a higher professional qualification relevant to the profession specified in the job offer), the duration of the employment contract, and the amount of the gross annual remuneration of the employment contract applied.

Furthermore, changes are envisaged to the procedure for issuing clearances, facilitations for family reunification and for the work mobility of EU Blue Card holders issued by other EU Member States, as well as measures to strengthen the employment and re-employment of EU Blue Card holders, who can engage in self-employment activities parallel to qualified subordinate employment and seek new employment in case of unemployment.

More specifically, “highly skilled” foreign workers must alternatively possess:

  1. a tertiary-level higher education degree or a post-secondary level professional qualification issued by the competent authority in the country where it was obtained, attesting to the completion of a higher education course lasting at least three years;
  2. the requirements provided for by Legislative Decree No. 206/2007 limited to the exercise of regulated professions;
  3. a higher professional qualification attested by at least 5 years of professional experience comparable to tertiary-level higher education qualifications, relevant to the profession or sector specified in the employment contract or binding offer;
  4. a higher professional qualification attested by at least 3 years of relevant professional experience, acquired in the seven years preceding the submission of the EU Blue Card application, concerning managers and specialists in the field of information and communication technologies referred to in ISCO-08 classification, No. 133 and No. 25.

The legislation concerning the EU Blue Card applies to foreigners meeting the above requirements:

  • residing in a third country;
  • regularly staying in the national territory, including seasonal workers, beneficiaries of international protection, holders of a residence permit for research, and holders of an ICT residence permit for intra-corporate transfers pursuant to Article 27-quinquies;
  • staying in another Member State;
  • holders of the EU Blue Card issued in another Member State.

The employer’s application (Form BC), submitted to the competent Single Immigration Desk pursuant to Article 22, TUI, in addition to the document verifying the unavailability at the relevant Employment Center of a worker already present in the national territory, unless the EU Blue Card application concerns a third-country national already holding another residence permit issued for highly skilled work purposes, to the nominative request, to the documents regarding housing arrangements, to the proposed residence contract, to the commitment to report changes, to the affidavit referred to in Article 24-bis, paragraph 21, TUI and without prejudice to what is provided for in paragraph 5-ter, Article 22, RUI, must indicate under penalty of rejection:

  1. the proposed employment contract or binding job offer lasting at least 6 months, for the performance of work requiring one of the requirements set out in paragraph 1, Article 27-quater, TUI;
  2. the tertiary-level education degree or professional qualification; or, alternatively,
  3. the attestation of the worker’s possession of the higher professional qualification, pursuant to the same paragraph 1, letters c) and d), Article 27-quater (“Entry Requirements”), through a specific declaration by the employer requesting the EU Blue Card, accompanied by the employment contracts and/or pay slips to be attached to the application; or alternatively,
  4. the requirements provided for by Legislative Decree No. 206/2007 limited to regulated professions, the exercise of which is allowed only following registration in Orders or Associations or in Lists, registers, and records kept by public administrations or bodies, if registration is subject to the possession of professional qualifications or the verification of specific skills;
    5. the amount of the annual remuneration, as derived from the employment contract or the binding offer, which must not be less than the remuneration provided for in the national collective agreements, entered into by the most representative trade unions at the national level, and in any case not less than the gross average annual remuneration as determined by ISTAT.

Applications will be submitted to the competent Single Immigration Desk of the Prefecture – Government Territorial Office and using the computerized system active for all other procedures within the competence of the Single Immigration Desks.

Please note that for the electronic submission of applications on the website https://portaleservizi.dlci.interno.it/, possession of an SPID identity or the CIE is necessary. Once logged in as described above, it is possible to access the Request Forms area and select the application form for the issuance of the EU Blue Card work clearance (Form BC).

Digital Nomads and Remote Foreign Workers

With the recent Ministerial Decree dated February 29, 2024, the Ministry of the Interior has regulated the procedures and requirements for the entry and issuance of residence permits to citizens of non-European Union countries, hereinafter referred to as foreigners, who carry out highly skilled work activities through the use of technological tools that allow remote work, either autonomously or for a company not resident in the national territory. Indeed, categories of highly skilled workers eligible for the respective residence permit have been identified, and the minimum income limits for the applicant and the necessary procedures for verifying the work activity to be carried out have been defined.

It is immediately indicated that in the event these workers intend to carry out their activity in Italy, entry and residence for periods exceeding ninety days are permitted outside the quotas specified in Article 3, paragraph 4, TUI. For entry and residence periods of less than 90 days, the issuance of an entry visa and residence permit is required.

The measure then provides two distinct definitions:

  1. that of “digital nomad,” namely a foreigner who carries out self-employment activities using technological tools that allow remote work;
  2. that of “remote worker,” namely a foreigner who, through the use of technological tools allowing remote work, performs subordinate employment or collaboration activities.

The distinction between the two figures, therefore, lies in the autonomy of the performed service.

The following requirements for the issuance of entry visas and residence permits regarding these individuals are then indicated:

  • they must have a minimum annual income, derived from lawful sources, not less than triple the minimum level required for exemption from participation in health care costs;
    b) they must have health insurance for medical treatment and hospitalization, valid for the national territory and the duration of the stay;
  • they must have suitable documentation regarding housing arrangements;
  • they must demonstrate previous experience of at least 6 months in the field of work to be carried out as a digital nomad or remote worker;
  • they must present the employment or collaboration contract or the related binding offer, if remote workers, for the performance of work activities.

To the foreign worker holding an entry visa, a residence permit is then issued in accordance with the procedures provided for in the TUI and its implementing regulation. This permit must be requested directly from the Questura of the Province in which the foreigner is located, within 8 working days of entry into the State territory.

This residence permit, bearing the wording “digital nomad – remote worker,” is issued for a period not exceeding one year and is renewable annually, provided that the conditions and requirements for its issuance persist. Said residence permit is not issued, or if already issued, it is revoked if the requirements or conditions required by the law are no longer met.

It is noted that foreign workers are allowed family reunification as per Article 29, paragraph 1, letters a) and b), TUI; family members will be issued a residence permit for family reasons.

A specific chapter concerns the verification of compliance with contributory provisions. Indeed, it is provided that the Questura communicates the issuance of the residence permit to INPS and INAIL for competence verifications, transmitting a copy of the employment or collaboration contract. For these workers, if applicable, the provisions of bilateral agreements on social security concluded between Italy and the respective third country apply; in the absence of such agreements, the Italian legislation on social security and insurance applies.

There are also provisions regarding the verification of compliance with tax provisions. The tax code is generated and communicated by the Questura to digital nomads and remote workers, not belonging to the European Union, upon issuance of the residence permit. Given their status as self-employed workers, digital nomads will also need to request the allocation of a VAT identification number. The aforementioned foreign workers are ordinarily subject to tax provisions concerning checks on direct taxes and VAT.

Benefits offered to employees within a corporate welfare plan through the use of a computer application 

In the perspective of promoting sustainable mobility services to be offered to employees for commuting between home and work, companies can, within a corporate welfare plan, develop a dedicated application (APP) to access the aforementioned services. In particular, the sustainable mobility services that employees will be able to access are as follows:

  • car sharing exclusively for the use of electric vehicles,
  • electric charging for cars and vehicles,
  • bike-sharing,
  • scooter-sharing exclusively for the use of electric vehicles,
  • electric scooter,
  • use of local public transportation.

These services, intended for all employees or specific categories of employees, will optimize and reduce, in terms of environmental sustainability and road safety, the social costs (lower environmental costs, reduced traffic congestion, etc.) and the individual transportation costs related to the home-work-home commute, promoting responsible behavior by employees towards the environment and resource utilization. Given the aforementioned purposes, a question was posed to the Revenue Agency regarding whether the use of the listed mobility services and the use of the APP could be considered as excluded from taxation under article 51, paragraph 2, letter f), of the Income Tax Consolidation Act (TUIR). The technicians of the Revenue Agency, in response to inquiry no. 74/E/2024, believe that the services offered, responding to the purposes of “social utility,” may benefit from tax and contribution exemption under current regulations. Let’s analyze in detail why this conclusion was reached.

Article 51, paragraph 1, TUIR provides that all sums and values, received for any reason during the tax period, also in the form of liberal contributions, related to the employment relationship, constitute income from employment. This provision includes in the income from employment all sums and values that the employee receives in relation to the employment relationship (the so-called “principle of inclusiveness”), subject to the strict exceptions contained in the subsequent paragraphs of the same Article 51, TUIR. In particular, paragraph 2, letter f), provides that the following do not contribute to the formation of income from employment: “the use of works and services recognized by the employer voluntarily or in accordance with provisions of a contract or agreement or corporate regulation offered to all employees or categories of employees and to family members indicated in Article 12 for the purposes referred to in paragraph 1 of Article 100.” The aforementioned Article 100, TUIR, entitled “Charges of social utility,” establishes that “Expenses related to works or services usable by all employees or categories of employees voluntarily incurred for specific purposes of education, training, recreation, social and health care or worship are deductible for an overall amount not exceeding 5 per thousand of the amount of expenses for dependent work performances resulting from the income tax return.” In relation to the scope of application of the mentioned letter f), it has been repeatedly clarified in practice that, for exclusion from the formation of income from employment to occur, the following conditions must be jointly met:

  • the works and services must be made available to all employees or categories of employees;
  • the works and services must exclusively concern in-kind benefits and not cash substitutes;
  • the works and services must pursue specific purposes of education, training, recreation, social and health care or worship as referred to in Article 100, paragraph 1, TUIR.

The works and services envisaged by the regulation can be made directly available by the employer or by external structures to the company, provided that the employee remains unrelated to the economic relationship between the company and the third-party service provider.
With this premise, the agency specifies that in the event of the provision of sustainable mobility services offered through an APP to employees, since the aforementioned services will be available only to those who do not already have the assignment of a car for mixed use as a fringe benefit, the services related to sharing and electric scooters for the home-work-home commute will be allowed only in cases where the workplace is located in areas that allow the reuse of transportation by other people, thus ensuring the effective sharing of the use of such means to reduce social transportation costs, and that there will be no reimbursement of expenses incurred directly by the employee, there will be no formation of taxable income for the employee.

LDP provides Tax, Law and payroll  scalable and customised services and solutions. LDP Professional have also matured a significant expertise in  M&A, Corporate Finance, Transfer Price, Global Mobility Consultancy and Process Automation. 

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