The 90-Day Rule For EU Citizens in Italy. Can You Get Fined For Overstaying? The Official Response.

Our focus today is on the legal and tax implications of overstaying in Italy as an EU citizen. This is considered a grey area with much disinformation being passed around about fines, bans from entering the country and other frightening prospects for the EU citizen that does not register their presence in Italy within 90 days of their arrival. Others talk about the so-called "90-day rule" - a limit on how long you can legally stay in the Schengen area as a visitor - which never, ever applies to EU or EEA citizens.

We decided to get it straight from the source and consulted the EU Commission legal service on the matter. The verdict? Good news: as we expected, EU citizens can "overstay" without penalty, for instance if they are on a very long holiday, or for any other reason that makes them visit Italy, and yet do not wish to to take up permanent residency. Note, however, that there may be tax implications in your sojourn as a visitor being very long in the same tax year.

While this article seeks to provide clarity on the subject, Expatax has designed a TAX AI chatbot housed at the bottom of this page to provide answers to further inquiries you might have.

Introduction: Freedom of Movement vs. Registration Requirements

The principle of free movement within the European Union is a cornerstone of EU citizenship, offering the liberty to travel, work, and live across Member States. However, this freedom comes with certain administrative obligations, including the registration of one’s presence in a host country. For the numerous EU citizens who find themselves extending their stay in Italy, this interplay between freedom and regulation is crucial. The question arises: what happens if a EU citizen exceeds the 90-day threshold without registering their presence?

Definition: Overstaying defines the act of remaining in a country longer than permitted under visa or residency rules. This is an area we perceive seems to be a grey area especially for EU citizens who enjoy freedom of movement across EU member states. Overstaying, nonetheless, can have serious tax implications, so it's crucial to understand them.

What Happens If You Do Not Register As A Resident Within 90 Days?

Registration Rules and Realities

Under EU law, specifically Directive 2004/38/EC, there is an expectation for EU citizens to register their residence in a host country if they intend to stay beyond 90 days. The intricacies of this directive and national law have significant bearings for those who may not have registered within this period, intentionally or otherwise.

Implications of Non-Registration

The Italian approach to EU citizens overstaying the 90-day mark without registering is notably lenient. The absence of a specific registration deadline is a relief to many, signalling a level of flexibility. However, this should not be mistaken for a lack of obligation. Upon control or inspection, the burden of proof for one’s right to reside falls on the individual - showing your passport or national ID card showing you are a EU citizen is enough.

Sanctions: A Measured Approach

The Italian system refrains from imposing monetary penalties for the lack of registration or failure to carry a registration certificate. This stance aligns with the notion that sanctions should be proportionate and non-discriminatory. It echoes the fundamental EU principle that penalties should not serve as a deterrent to the exercise of free movement.

Practical Steps: Securing Your Stay

Engaging with Authorities

While the situation is accommodating, it is prudent for individuals to formalise their status. Contacting local municipalities remains the recommended course of action for EU citizens needing clarity on their position. Municipalities are the front line of assistance, providing personalised guidance tailored to individual circumstances.

Legislative References at Your Fingertips

For those inclined towards due diligence, familiarising oneself with the legislative texts governing these matters is invaluable. References to specific Italian legislative decrees and EU directives are made available by the EU Commission, offering a blueprint for understanding one’s rights and obligations.

What About EEA Citizens, Swiss Citizens and Dual-Citizenship US Citizens?

As you are probably aware, the European Economic Area includes a number of countries - Iceland, Liechtenstein and Norway - which are not part of the European Union but whose European legal framework is largely the same. Switzerland also has a number of treaties with the European Union that approximate membership. For this reason, EEA and Swiss citizens have the right to move freely within the territory of the European Union, European Economic Area and Switzerland and, therefore, what described in this article also applies to them. Insofar as other individuals with dual citizenship that includes a EU/EEA citizenship - for instance, US citizens with an Italian or Irish passport - these are also fully entitled to freedom of movement and there is no risk for them to "overstay".

Careful: You Could Still Become an Unwitting Tax Resident

The juxtaposition of Italy's relaxed stance on registration deadlines against the backdrop of EU free movement rights offers a comforting narrative for EU citizens enjoying an extended sojourn. While Italy's embrace of EU directives fosters a hospitable environment, the essence of the law remains: there are rules to follow. It is this balance that EU citizens should navigate with both confidence and caution, ensuring their Italian dream remains uninterrupted by legal oversights.

Very importantly, you must remember that though you may not wish to register as a resident of the country, spending a significant amount of time in Italy may make you a tax resident for that year, which means that Italy will, generally speaking, have a claim to tax your worldwide income for the period.

Sources

• Directive 2004/38/EC - On the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States.
• Decreto Legislativo 6 febbraio 2007, n. 30 - Implementation of Directive 2004/38/EC on the right of EU citizens and their family members to move and reside freely.
• Decreto Legislativo 28 febbraio 2008, n. 32 - Amendments to Legislative Decree No. 30/2007 concerning the implementation of Directive 2004/38/EC.
• Decreto del Presidente della Repubblica 28 dicembre 2000, n. 445 - Legislative provisions on administrative documentation.