I kept earning from abroad and assumed the old treaty still covered me. It does not anymore - planning the residency timing before the move saved me from a double bill.
A
Read the thread β¦Italy Β· Taxes
Avoid double taxation in Italy. Guide 2026.
If you live in Italy and still earn from abroad, you could be taxed twice now that the old treaty is suspended - but in most cases you can legally cut that to a single, lower bill. Here is how tax residency, declarations and the 5 percent regime actually work, plus free help from people who have done it.
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β¦The essentials
What actually decides your tax bill
Figures are indicative and rules tightened after the treaty was suspended in 2023.
Treaty suspended
The Russia-Italy double-tax treaty has been suspended since August 2023, so foreign income can be taxed at source abroad and again in Italy. The old credit mechanism no longer works the way it used to.
183 days (and more)
You are a tax resident if you spend 183+ days in Italy in a year - but family, a permanent home, your main business, or official registration also count under art. 2 TUIR. Any one of them can be enough.
23 to 43 percent
Italian income tax (IRPEF) runs from 23 to 43 percent by bracket. Stacked on a foreign withholding with no credit, a salary from abroad can be hit for 36 to 58 percent in the worst case.
Forfettario at 5 percent
New self-employed on an Italian P.IVA can use the flat-tax regime: roughly 5 percent for the first five years, then about 15 percent. Stop being a foreign tax resident and bill through Italy to pay there only.
You must declare
Foreign income, foreign accounts (the RW form) and assets abroad have to be declared. Automatic bank data exchange (CRS) means the tax office can see what you did not report.
β¦Avoid these
Common double-taxation mistakes in Italy
Assuming the Russia-Italy treaty still protects you
The treaty has been suspended since August 2023, so the foreign-tax credit mechanism no longer works the way it used to. Income taxed abroad can be taxed again in Italy with no offset.
Treat the treaty as gone and restructure your income sources accordingly before you move.
Relying on "under 183 days" as a safe rule
Italian tax law (art. 2 TUIR) also uses center of life, a permanent home, your main business, and official registration as independent residency tests. Any single one can make you a resident even if you spent fewer than 183 days in the country.
Check all four factors - 183 days, family, home, and registration - not just the day count.
Keeping a foreign sole-proprietorship while living in Italy
A foreign sole-proprietorship is transparent for tax purposes. As an Italian resident you are taxed on worldwide income, and a suspended treaty means no credit for what was withheld abroad - stacking bills to 36-58 percent in the worst case.
Switch foreign clients onto an Italian P.IVA before or shortly after establishing residency.
Missing the RW form for foreign accounts and assets
Italy requires residents to declare foreign bank accounts, investments, and real estate in the RW section of the tax return. CRS automatic data exchange means undeclared accounts surface eventually, with penalties on top.
File the RW form every year you hold foreign accounts or assets, even if the income was already declared.
Opening a P.IVA without first checking forfettario eligibility
The forfettario flat-tax at 5 percent for new self-employed is not automatic. If you open a P.IVA while still registered as a tax resident in another country, or if your revenue exceeds the regime threshold, you fall into ordinary IRPEF brackets of 23-43 percent instead.
Confirm you have cut ties with your previous tax residency and that your expected revenue stays inside the forfettario ceiling before electing the regime.
β¦Real cases from our community
People who did it
Condensed from the discussion on our forum, where members answer questions and post updates.
Moving my clients onto an Italian P.IVA with the forfettario regime dropped me to 5 percent. The catch is you have to stop being a tax resident back home first.
D
Read the thread I moved in September, so I was not a tax resident that year - that gave me months to set things up. The key step everyone forgets is cancelling your old registration when you leave.
S
Read the thread β¦The process
From double-tax risk to one lower bill, in five steps
- 1
Work out where you are resident
Check the 183-day rule plus center of life, home and family. With a residence permit you are presumed resident, and the burden of proof is on you.
- 2
Time the move
Arriving in the second half of the year usually means you are not a tax resident that year, giving you time to settle. If you leave, cancel your old registration.
- 3
Restructure your income
Move foreign clients onto an Italian P.IVA so the income is taxed in Italy only, instead of being withheld at source abroad with no credit.
- 4
Pick the right regime
New self-employed can elect the forfettario flat tax at about 5 percent for five years. Otherwise ordinary IRPEF brackets apply.
- 5
Declare everything
File the Italian return with foreign income, foreign accounts (RW form) and assets. CRS data exchange means undeclared accounts surface eventually.
The mistake that costs the most: assuming the suspended treaty still credits your foreign tax, or keeping a foreign sole-proprietorship while resident in Italy. Plan the switch to an Italian setup before you move, not after.
β¦FAQ
Double taxation Italy: questions answered
Is there still a double-tax treaty between Russia and Italy?
The treaty has been suspended since August 2023. That means the credit mechanism that used to offset foreign tax against Italian tax no longer applies. Income that is taxed at source abroad can be taxed again in Italy with no deduction for what you already paid.
How does Italy decide if I am a tax resident?
Under art. 2 TUIR you are a resident if any one of four factors applies for most of the year: you spend 183 or more days in Italy, your family is there, you have a permanent home there, or your main economic activity is there. Holding a residence permit creates a legal presumption of residency that you must actively rebut.
What is the forfettario regime and who qualifies?
Forfettario is a flat-tax regime for self-employed individuals: roughly 5 percent for the first five years (for those who have not had a P.IVA recently), then about 15 percent. To use it you must stop being a foreign tax resident, open an Italian P.IVA, and keep your annual revenue inside the forfettario ceiling. Ordinary IRPEF brackets of 23-43 percent apply if you do not qualify.
What happens if I keep earning from abroad while living in Italy?
As a tax resident you owe Italian tax on worldwide income. Without a working treaty credit, that income can also be taxed by the country that paid it, leading to a combined bill in the range of 36-58 percent. The practical fix is to move your foreign clients onto an Italian P.IVA so the income is taxed in Italy only.
Can I avoid becoming a tax resident by moving in the second half of the year?
Arriving after July 2 typically means you spend fewer than 183 days in Italy that calendar year, so you are usually not a resident for that year. This gives you time to restructure your income and registration before residency kicks in. It does not remove the other residency tests, so also check your registration status and center of life.
What is the RW form and do I have to file it?
The RW form is the section of the Italian tax return where residents declare foreign bank accounts, investments, and real estate held abroad. It is mandatory every year you hold foreign assets, regardless of whether income from them was separately declared. Italy participates in the CRS automatic exchange of bank data, so the tax office can cross-check what you report.
What Italian income-tax rates apply if I am not on forfettario?
Ordinary IRPEF runs from 23 percent on the lowest bracket to 43 percent on income above approximately 50,000 euros. Regional and municipal surcharges add a few more percentage points on top. Combined with a foreign withholding on the same income and no treaty credit, the total burden can be very high.
When should I cancel my registration in my home country?
You should deregister from your home country before or at the point you establish Italian residency. Staying registered abroad while also meeting Italian residency tests creates dual-residency risk and makes it harder to prove you are not liable for worldwide tax in both countries simultaneously.
Let's find your pathway
Free guidance β¦Read the full guides
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Member-written, updated for 2026. Free to read.
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Partita IVA
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