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On today's edition of Il Sole 24 Ore, Maria Lucia Di Tanna and Davide Greco comment on the Supreme Court judgement no. 30800 published on December 2nd, 2024, regarding foreign-source employment income: in this case, from the United States of America.
The judgement is significant as it addresses in a detailed manner the agreement rules related to the employment income provided by article 15 of the double tax Treaty (specifically in the case under investigation in the tax Treaty between Italy and the U.S.). They specifically provide clarifications regarding the relationship between the provisions laid down by the second period of paragraph 1 (concurrent taxation) and what is provided in paragraph 2 (exclusive taxation in the State of residence).
It shall be noted that the exclusive taxation in the State of residence represents an exception to the general rule of concurrent taxation in terms of employment income. For exclusive taxation to be applied in the worker's State of residence, three requirements must be met, namely:
- physically presence of the worker in the source State for no more than 183 days;
- remuneration paid by an employer not resident in the source State;
- remuneration paid by a PE of the employer, not located in the source State.
