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Elective Residence Visa for Italy

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An Elective Residence Visa allows non-EU citizens to reside in Italy

You should submit your application for an Elective Residence Visa (ERV) to the Italian embassy or consulate in your home country. For example, U.S. citizens can apply to the Italian consulates in New York, Miami, San Francisco. Canadians should apply to the Italian consulates in Toronto or Montreal.

The main requirement for obtaining an ERV is that the applicants must be able to support themselves autonomously in Italy. This must through an income unrelated to employment. Your income must be sufficient to exclude recourse to the Italian welfare system.

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Applicants for an Italian ERV must be able to provide documented guarantees

According to Italian law, ERV applicants should meet two essential elements. Firstly, they must have somewhere to live in Italy. This can either be a property they own, or a secured tenancy with a contract.

Secondly, applicants must have an income stream. This should be approximately Euro 31,000 per annum. This income must continue in to the future – for the period of stay in Italy.

Verifying that an ERV applicant has somewhere to live is fairly straightforward. However, the assessment regarding adequate finances implies a so-called discretionary evaluation by the consulate.

By law, this assessment cannot be  arbitrary. In other words, the applicant must be able to see a logical explanation behind the decision-making process.

The law sets out various principles which the consulate should take into consideration when deciding whether or not to grant an ERV.

In particular, the available financial resources should be “ample”, “autonomous” and “stable”, thus the applicant should be able to sustain himself/herself without working in Italy.

The above means that financial resources should be fully accessible to the applicant. And, that funds should not be subject to unexpected, sudden fluctuations. The consulate must be able to make a reasonable assumption that an applicant’s financial resources will also exist into the future.

The applicant’s financial resources should originate from pensions, life annuities, ownership of real estate, ownership of stable economic-commercial activities or other sources of income. Income cannot however be from employment.

In the absence of any logical, valid and concrete reasons, so long as an applicant for an ERV meets the above requirements, the consulate cannot refuse to grant an ERV.

Finally …

Do you think your ERV application was wrongly rejected or do you need help with an ERV application?

The evaluation of the elements for an ERV application by the consulate is discretionary. However, as previously mentioned, it cannot be arbitrary.

Should you need further information concerning an elective residence visa or preparing your application or, if you wish to appeal the denial of an ERV, please contact us.

 

You may also like to read about what to do if your elective residence visa application is refused. We also have a series of info videos that you may like to watch.

Italian Elective Residence Visa (ERV) Refused – Case Studies

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Applying for an Italian elective residence visa

There are two main requirements when applying for an Italian elective residence visa (ERV). Firstly, the availability of a dwelling, which an applicant has elected as their residence in Italy. This can either be an applicant’s own Italian property or a rental property with a tenancy agreement.

Secondly, by law, an applicant must have a financial flow corresponding to approximately Euro 31,000 per annum. The law further requires that finances be ample and autonomous financial resources. These finances should continue into the future – for the duration of the applicant’s residence in Italy.

An Italian consulate in the applicant’s home country is responsible for evaluating the above criteria. While the consulate’s decision is discretionary, the evaluation cannot be arbitrary.

In other words, a consulate cannot refuse to grant an ERV in the absence of valid reasons to do so. Furthermore, an applicant must be able to understand the logic behind the decision-making process of the relevant authority.

An applicant can challenge a consulate’s refusal to grant an ERV in court.

Case studies: appeals to overturn refusals of an Italian elective residence visa

Every year, a number of ERV applicants receive ERV refusals. Here, we examine two such cases and discuss Judgment no. 1396 of 5th December 2018.

The ERV applicants in both of these cases lodged appeals for the refusal of an ERV against the Italian Consulate General in New York. The cases took place at the Administrative Court of Lazio.

Case 1: applicants successfully challenge consulate’s refusal of an Italian elective residence visa

In the first case, no. 6421, the applicants had applied for an ERV with the intention of permanently establishing their residence in Turin.

The consulate refused the application on the grounds that the applicants did not meet the income requirement set by Italian law for an ERV.

In this case, the applicants had an annual rental income corresponding to USD80,000.00 deriving from a property in Brooklyn. They also had additional annual income corresponding to USD60,000.00. The applicants received this income on a monthly basis from an insurance company. Their financial resources clearly exceeded the amount set by Italian law.

When they refused to grant an ERV, the consulate generically referred to the value of assets being subject to market fluctuations. They neither specifically analysed the sources of income nor did they explain their reasoning for refusing an ERV. The consulate simply said that the declared incomes appeared to be steady and continuous over time but they considered them insufficient to counterbalance the possible fluctuations of their value.

For this reason and in light of the documentation provided by the applicants, the Administrative Court ordered the consulate to review its decision.

Case 2: The court confirmed the consulate’s decision to deny an ERV

In the second case, no. 1396, the consulate also refused an ERV. In her application to the Italian consulate in New York, the applicant had declared starting a professional activity as a consultant in 1999. She maintained that she therefore had sufficient savings to fund her lifestyle without needing to work.

After having her application for an ERV rejected three times, the applicant decided to challenge the decision. She based her case on a lack of due diligence and arbitrary decision-making.

The Italian consulate in New York made the following statement regarding their ERV refusal:

“The information you provided on the automatic withdrawal from your investment account shows that the amount paid into your checking account, generates a yearly income of USD 36,000 (approx. Euro 32,000). This barely meets the minimum required amount of Euro 31,000 per annum, as set forth by Italian law, for the issuance of an ERV, especially considering that these funds are subject to fluctuations in Euro/USD exchange rates.

Also, your financial assets – although substantial – are mostly invested in stock funds and investments that, by definition, fluctuate significantly with the financial markets and demonstrate a high level of volatility. Therefore, your funds do not correspond to the documented and detailed guarantee of substantial and stable private income, which must be of a regular nature and reasonably certain in the future, as the law requires”.

Three main elements formed the basis of the consulate’s refusal of an ERV in this case.

In the first instance, there was an absence of adequate and documented guarantees. That is to say, there was no evidence concerning availability of large, autonomous, stable and regular financial resources. In addition, there was no reason to assume that the applicant’s financial resources would exist into the future.

Secondly, the applicant’s declared income, corresponding to USD36,000 (approximately Euro32,000) barely met the legal annual requirement in Italy (Euro31,000).

Thirdly, as the applicant’s financial resources were mostly invested in stocks, they were subject to foreign exchange rate fluctuations.

The Administrative Court in Lazio refused the applicant’s appeal. The court judged that the consulate’s refusal to issue an ERV did not appear to be unreasonable.

According to Italian case law, a bank account, unless extremely significant, does not constitute evidence of ample financial resources with future continuity

The court in this case, therefore, upheld the consulate’s refusal of an ERV. The applicant’s assets, although significant, did not generate sufficient income to warrant the issuance of an ERV. The court also concurred with the consulate regarding the volatility of stock markets and foreign exchange risks.

Finally …

An applicant for an Italian elective residence visa can always contest a consulate’s refusal of an Italian elective residence visa. If you believe a consulate has misinterpreted or misunderstood your application, we would recommend that you seek legal support in contesting the consulate’s decision.

The Italian Elective Residency Visa (ERV) – Case StudyShould you need further information concerning an elective residency visa, please feel free to contact De Tullio Law Firm at the following email address info@detulliolawfirm.com.

You may also be interested in Elective residence Visa Italy: general information

Elective Residence visa Italy

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What is a national visa for elective residence?

Elective residence in Italy requires a national visa. This grants access to Italy for overseas nationals wishing to reside in Italy. Applicants must be able to support themselves financially, without carrying out any type of work.

Article 13 of Attachment A of the inter-ministerial Decree MAE n°850 defines the types of Italian entry visas and requirements to obtain them.

What paperwork is necessary to obtain an elective residence visa?

Foreigners wishing to obtain an elective residence visa will have to provide documentary proof that they own or rent a property in Italy. This will be where you  will be living. In addition, proof of adequate financial resources is necessary.

Successful applicants for an elective residence visa should have annual funds of at least €31,000. This equates to approximately triple the required per diem amount, on an annual basis, as estimated in Chart A. This chart is an attachment to the Ministry of Internal Affairs directive of March 1st 2000.

Annual income may derive from savings, pensions, annuities, real estate, businesses or from other sources. However, it cannot be from employment.

Who is entitled to an elective residence visa in addition to the applicant?

A cohabiting spouse or registered partner, minors and adult dependent children will receive the same visa, so long as financial means are adequate to support them. This means your total amount of annual income should include an extra 20%, if the visa is for a spouse whereas an additional 5% is necessary for each dependent child.

What level of annual finances do you need to gain elective residence in Italy?

The “minimum financial requirement” in accordance with Italian legislation is approximately €31,000 per annum. However, it is likely that authorities will assess the situation on a case by case basis.

How long is an elective residence visa valid and, can it be renewed?

An elective residence visa is valid for 1 year. Thereafter, the visa is renewable at provincial police headquarters on the condition that the previously mentioned original requirements remain unchanged.

You must apply for an elective residence visa at an Italian Consulate in your home country and convert it into a residence permit within 8 days of your arrival in Italy – as is the case for all other types of extended stay national visas.

It is not possible to renew or reinstate a residence permit if you interrupt your stay in Italy for a span longer than six months, unless you can prove that the interruption was for significant motives such as military duties.

Is any type of employment permitted with an elective residence visa?

No. This type of visa does not permit any employment activity in Italy. You must therefore be able to support yourself on an income that derives from other sources.

Is there any other type of visa for a long-term stay in Italy?

After 5 years of residence in Italy, you can request a permanent EU residence permit. This means that a holder will be able to benefit from the same terms as those of EU citizens.

Finally …

We have over 55 years of helping overseas nationals obtain Italian residence. If you need help or would like to discuss your situation, please get in touch with us.

You may also find our guide to buying property in Italy useful.

Resident or Domiciled in Italy for tax purposes?

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Are you resident or domiciled in Italy?

In this article, we compare being resident or domiciled in Italy and explore the tax implications.

According to Italian tax law, individual tax residency is pursuant to tests. An individual may find themselves tax resident although they only have relatively minor contacts with Italy. This might be property ownership, frequent visits to the country, or business interests in Italy.

If the Italian tax authorities determine that an individual is tax resident in Italy, the taxpayer is subject to worldwide taxation in Italy.

Tax would therefore be applicable for both income and estate tax purposes. It would include an obligation to report all assets wherever they are in the world. In addition to financial assets and accounts, it requires an individual to report all non-financial assets such as, cars, houses, planes, artworks.

Non-Italian nationals with interests in Italy should pay particular attention to these matters to avoid becoming an unintended Italian tax resident. Because this is a complex topic and, each case is different, we recommend that you seek advice and guidance from your lawyer and accountant.

Applicable tax laws determine whether an individual is resident or domiciled in Italy

Domicile

Domicile is generally determined by an individual’s intention to permanently or indefinitely reside in Italy. Often, an individual will physically have a presence in the country. Domicile is a legal concept. Its rules have been established by way of case law rather than a statutory definition. There are three types of domicile.

Domicile of Origin

This is usually acquired from an individual’s parents.

Elected Domicile

By actually residing in Italy, the individual demonstrates the intention of remaining permanently or indefinitely in Italy. In this way, an individual may acquire an elected domicile – also known as a domicile of choice. Where an individual later gives up elected domicile, domicile of origin is automatically re-acquired.

Domicile of Dependency

This is the domicile a minor holds. When the minor reaches 18 they then acquire elected domicile.

Residence

Domicile takes into account subjective elements of an individual’s intentions. The country where an individual habitually lives determines residence.

The EU test for habitual residence is based on an individual’s interests rather than by a particular duration of residence. In 2014, the European Commission published a practical guide on the Habitual Residence Test.

Fiscal implications

Under Italian tax law, three alternative tests determine an individual’s tax liability in Italy. The tests are registration, residence and domicile. If an individual meets one of the three tests for more than 183 calendar days per annum, this triggers an Italian tax liability.

Registration test

This is a straightforward test. If an individual has registered as a resident with their local municipal office – in the comune where the individual’s residential address is located, they are liable to pay tax in Italy.

Residence test

The residence test comprises two components.

The first component looks at whether physical presence in Italy is regular and continuous, as opposed to sporadic and occasional. If an individual spends time both in Italy and another country, periods of presence outside of Italy are compared with the periods of presence in Italy. This ascertains where presence is prevalent for tax purposes.

The second component of the residence test is more subjective. It is based on an individual’s intention to stay and live in Italy for the foreseeable future. A variety of aspects will determine an individual’s intention to live in Italy on a regular basis. In order to determine intentions, authorities will look at an individual’s conduct, social and personal habits. Authorities will also consider working relationships, family relationships, business and personal activities.

Italian tax liabilities arise if an individual’s physical presence in Italy is prevalent compared to an individual’s presence outside of Italy. For example, a regular and continuous presence in Italy is deemed to exist even if an individual travels abroad on a frequent basis. In other words, if an individual is away from Italy for extended periods of time but then returns as soon as possible. This would denote that an individual maintains Italy as the principal centre of their social and family relations.

Domicile Test

This third test aims to define the place where an individual has their principal centre of interests for business and or social reasons. In this context, ‘interests’ include personal, social, moral, familiar, economic, professional and business interests and relationships.

The domicile test revolves around an individual’s intention to establish and maintain their main centre of relations and interests in Italy.

There are tax implications based on the nature, extent and quality of the connections between an individual and Italy, compared with an individual’s connections with any other country.  As a result, an individual who primarily lives abroad but, maintains their principal centre of interests in Italy satisfies the domicile test.

The domicile test therefore requires careful and comparative evaluation to balance all the facts related to business or personal relationships and connections with Italy.

Case Law regarding the legal concept of domicile

In 2011, the Italian Supreme Court referred to a 1991 decision of the European Court of Justice relating to a non-tax matter. The Italian Supreme Court concluded that, in the case of multiple relations and ties with different countries, where the location of the principal centre of an individual’s interest cannot easily be determined, a prevalent consideration should be given to the relations of a personal nature.

However, more recent decisions suggest that extensive economic interest may outweigh personal connections in establishing an individual’s domicile. Thus, an individual may still be liable to pay tax in Italy.

In a ruling in April 2012, the Italian Supreme Court held that a tennis player living in Monaco qualified for tax residency in Italy. This, despite the family proving that they lived in Monaco. They provided proof through children’s school attendance records, household utility bills, membership of local clubs. The ruling took into consideration the fact that the tennis player maintained significant interests and management positions at several family-owned Italian companies. The individual mainly managed these matters from Italy.

In this case, residence identified the taxpayer’s habitual and regular place of living, while domicile identified the taxpayer’s main center of personal, financial and business interests.

Resident or domiciled. Tax guidance

The Italian tax authorities have issued specific guidance on determining whether individuals are resident or domiciled in Italy. Circular n. 304/E of December 2, 1997. Circular 304 provides instructions for the tax agency’s control and audit activities, which should include the collection and review of the following.

– All information contained in the tax agency data base system.

– Copies of all public documents relating to purchases. This includes real estate, gifts, formation of companies and entities, capital contributions to companies and entities.

– All information on transfers of money from or to foreign countries.

– Information regarding the taxpayer’s family relations in Italy.

– The taxpayer’s economic interests in Italy.

– Information about taxpayer’s intention to remain and live permanently in Italy.

Finally …

De Tullio Law Firm specialises in Italian and international property law. We have over 55 years of helping overseas nationals obtain Italian residence. If you need help or would like to discuss your situation, please get in touch with us.

 

You may like to read How to get a mortgage in Italy

Requesting an Italian Visa for Elective Residence

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What is a national visa for elective residence?

The Italian visa for elective residence grants access to Italy to non-EU nationals wishing to reside in the country. The main requirement for obtaining an ERV is that the applicants must be able to support themselves autonomously in Italy. This must be through an income unrelated to employment. Your income must be sufficient to exclude recourse to the Italian welfare system.

What paperwork is necessary in order to obtain it?

Non-EU nationals wishing to obtain the Italian Visa for Elective Residence, will have to provide documented proof of a dwelling as their residence. As well as the availability of annual financial income. Such income is set at about 31,000 euros a year and can come from the entitlement to substantial incomes, from owning real estate, from stable businesses or from any sources other than subordinate employment.

Can other families also get an Italian Visa for Elective Residence?

The cohabiting spouse, underage and adult dependent children will receive the same visa. Providing that the aforementioned income is deemed as adequate to the ends of their sustenance as well. Furthermore, the total amount of the monthly incomes will have to increase by 20%, in case the visa is requested for the spouse as well . Such increase will have to add up to at least 5% for each dependent child.

How long is the visa valid and what does the renewal procedure entail?

The visa for Elective Residence is valid for 1 year after which you can renew it at the competent police headquarters providing that the original requirements are still valid. Furthermore, you cannot renew the residency permit if you have been ouside of Italy for longer than six months, except if it was mandatory due to military duties or other significant and substantiated motivations.

Is any working activity possible with an Italian Visa for Elective Residence?

No, this type of visa does not allow carrying out any working activity in Italy. After 5 years, it is possible to request an EC permit of residency for longterm stayers. This has permanent validity and allows its holder to benefit from the same treatment as EU citizens.

Finally …

In conclusion, we understand that Italian residency matters can be confusing and difficult to navigate. If you need help concerning an Italian Visa for Elective Residence please get in touch with us. We are here to help.

For more information about the Italian visa for Elective Residence, you may like this article. You may also like to watch our info videos.