In 2024, a series of new regulations and initiatives introduced by Italian 2024 Budget will significantly impact Italians living abroad, non-EU tourists, and the economic landscape of Southern Italy. These changes, encompassing mandatory registration for expatriates, modifications to tax-free shopping limits, and the establishment of a Special Economic Zone (ZES Unica) in the “Mezzogiorno region,” represent a concerted effort by the Italian government to streamline administrative processes, boost tourism, and invigorate regional economies.

AIRE Registration: A Must for Expatriates

Beginning in 2024, Italians residing abroad for more than 183 days a year are mandated to register with the AIRE (Registry of Italians Residing Abroad) within 90 days of their move. This longstanding requirement, now reinforced by the budget law of December 30, 2023, imposes penalties ranging from 200 to 1,000 euros per person for each year of non-registration. This includes all family members, with parents accountable for their children's registration.

The implications of non-compliance extend beyond financial penalties. Non-registered individuals are presumed to remain residents of Italy for tax purposes, potentially leading to double taxation issues, especially given the EU's enhanced cooperation in tax matters since 2011. The administrative complexities and potential legal costs involved in resolving such issues underscore the importance of timely AIRE registration.

Tax-Free Shopping: Lower Thresholds for Non-EU Tourists

In a move to stimulate international tourism, Italy has reduced the minimum purchase amount for tax-free shopping. Effective February 2024, the threshold for VAT exemption on goods purchased by non-EU tourists will be lowered from €154.94 to €70. This aligns with EU Directive 2006/112/EC and applies to goods intended for personal or family use. Sellers are responsible for ensuring compliance, and the goods must be transported out of Italy within three months of purchase. Electronic invoicing through the "OTELLO 2.0" system is required to document these transactions, with the seller responsible for proving the goods' departure from Italy within four months.

ZES Unica Mezzogiorno: Revitalizing Southern Italy

January 1, 2024, marks the inauguration of ZES Unica Mezzogiorno, a unified Special Economic Zone covering Southern Italian regions like Abruzzo, Basilicata, Calabria, Campania, Molise, Puglia, Sicily, and Sardinia. This initiative, detailed in Decree-Law No. 124 and Law No. 162, aims to reinvigorate the economy of the Mezzogiorno area through several key measures. The 2024 Budget Law has allocated a €1.8 billion tax credit for investments in ZES Unica. A strategic development plan aligning with the PNRR and European structural funds focuses on sector-specific development, industrial conversion, and addressing the challenges of insular regions like Sicily and Sardinia.

To facilitate business operations, a digital one-stop shop (S.U.D. ZES) and a multilingual web portal will be established. Additionally, a streamlined unified authorization process will replace the need for multiple permits, significantly easing the administrative burden for businesses. Development strategies within ZES Unica will adhere to environmental sustainability principles.

Conclusion

The year 2024 heralds a new era of regulations and opportunities in Italy. For expatriates, understanding and adhering to AIRE registration is crucial to avoid legal complications and financial penalties. Tourists from outside the EU stand to benefit from more favorable tax-free shopping conditions, making Italy an even more attractive destination. Lastly, the ZES Unica initiative promises to inject vitality into Southern Italy's economy, offering a blend of financial incentives, administrative simplifications, and strategic development focused on sustainability. Collectively, these changes demonstrate Italy's commitment to fostering economic growth, supporting its citizens abroad, and enhancing its appeal as a global tourist hub.

At PHC Advisory, we can offer you full support on matters regarding doing business in Italy and Asia, or any other issues your business may face. If you would like to know more about policies relevant to your business in Italy or Asia, please contact us at info@phcadvisory.com. 

PHC Advisory is a company of DP Group: an international professional services conglomerate of companies with approximately 100 experienced professionals worldwide. We offer comprehensive services in tax, accounting, and financial consulting, including financial supervision, financial audit, internal audit, internal control over financial reporting, and support for audited financial statements and annual audits, ensuring clients' financial transparency and compliance.

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The content of this article is provided for informational purposes only, financial advice must be tailored to the specific circumstances on a case-by-case basis, and the contents of this article do not legally bind PHC Advisory with the reader in any way.

If you want to know more about the 2024 Italian Budget, please have a look at our previous articles:

· Taxes in Italy: Updates for 2024

· Italy 2024 Budget: Key Incentives and Employment Initiatives