Tax domicile at the place where the independent activity is carried out in Italy at the opening of the VAT number of the taxpayer registered with the AIRE and resident in the United Kingdom. In this way, the operator will be considered a taxable person in the same way as a resident. Income generated from this activity will be taxed in Italy. And so is the answer to question 429/2022 of revenue.
The case concerns an Italian national residing in the United Kingdom and registered with AIRE, who intends to carry out an independent activity in Italy without first carrying out it in the foreign country of residence. The question is whether it can indicate at the opening of the VAT number in Italy the place where the professional activity is carried out as a tax domicile.
No hurdles from tax domicile in Italy
The revenue recognizes the intent of the taxpayer to establish his ‘center of interest’ in Italy and to conduct his business there. Accordingly, according to the agency, “the status of establishing tax domicile in Italian territory, even in the presence of residence in a third country (UK), is not an obstacle to the applicant being considered a taxable person in as a resident person”. Among other things, the taxpayer must indicate on Form AA9/12 of the Declaration of Activities for VAT purposes the “tax domicile or place where the business activity will be carried out, in order to obtain an ordinary VAT number”.
Then there is the tax front. According to Revenue, “the income attributable to the activity carried out in Italy will be subject to taxes there.” The response to the questioning refers to Article 14 of the Agreement between Italy and the United Kingdom (approved by Act 329/1990). The base section is the concept of the “fixed base” of independent activity. In short, the provision shall tax income from a professional or independent activity exclusively in the State of residence but “without prejudice to the income which the beneficiary receives thanks to a ‘fixed base’ situated in the other Contracting State, the premise that it establishes a simultaneous tax regime applicable in both countries and the subsequent application of the tax credit in the country of residence for taxes paid abroad.
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