The ruling confirms the interpretation that registration with AIRE is necessary but not sufficient for Italian citizens who establish their residence abroad (article 2 Tuir). Matter and form combine to highlight how apparently simple and indisputable acts, (in this case a move to Brazil) must be meticulously planned to avoid issues of tax non-compliance.
The dispute relates to the appeal lodged by the taxpayer against four notices of assessment for the tax years 2007-2010 where the revenue agency, after having ascertained the existence of undeclared financial assets in taxable countries preferred by the individual who declared to be a resident abroad, recovered the higher IRPEF tax and imposed sanctions. According to the appeal court judges, the taxpayer had sufficiently proved that he was resident in Brazil “from 2007 with the consequently invalidity of the disputes relating to the years 2008, 2009 and 2010”
The revenue office filed an appeal against this decision, siting that the cancellation from the register of residence in the municipality of Turin and the subsequent registration to AIRE only happened in 2011, and in the preceding years the Regional Tax Commission had made an error in not recognising that the individual was subject to Italian taxation.
The Supreme Court highlights that the Tuir (art.2, co, 2) states: “for the purposes of income tax, persons who for most of the tax period are registered in the registers of the resident population or are resident in the territory of state are considered residents. In Italy the law has three prerequisites that establish fiscal residence in Italy: the first, of a formal nature which is the registration in the registries of resident populations and the other two of a factual nature, comprising residence or domicile in the state as defined in accordance with the civil code”.
