Did you complete your Italian citizenship process and your AIRE registration is out of date? Hurry and update it because the fine will be hefty.
From January 1, 2024, Italian-Brazilians living outside Italy will face fines of thousands of euros if they do not register with AIRE, the Registration of Italian Residents Abroad.
The new budget law introduces control obligations for municipalities of last residence, exchange of information with the Inland Revenue for tax verification and heavy fines for those who do not register.
The registration duty has existed for decades, dating back to a 1954 law, but until now many viewed it as a choice, particularly because the penalties for failing to comply were modest and rarely enforced.
New budget legislation addresses Italians residing abroad, imposing penalties of 200 to 1000 euros (R$ 1.070 and R$ 5.360) for each year of non-enrollment in AIRE, with a maximum limit of 5 years subject to penalty.
Fines will be applied per individual and not per family unit, including minors. Thus, a family of four people who have lived in Brazil for more than five years and neglected this administrative procedure may have to pay a fine of up to 4 thousand euros — around R$107 thousand.
What is AIRE?
AIRE is a registry managed by municipalities in collaboration with consular representations. Registration is mandatory for those who transfer their residence abroad, but many compatriots neglected it, some due to ignorance, others for illicit purposes, such as continuing to pay the reduced property tax on their first home or receiving family benefits.
Many are discouraged, mainly by fear of losing access to subsidized medicines, hospital care and family doctors in Italy.
Who should sign up?
AIRE applies to all Italian citizens who transfer their residence abroad for more than 12 months. It is important to note that the obligation does not begin after 12 months, but from the moment of transfer. Application must be made within 90 days of transfer.
The obligation also applies to citizens born abroad to Italian parents (including minors) whose birth certificate was registered in Italy, and to those who acquired Italian citizenship but live permanently abroad.
Why sign up?
Firstly, because it is not only a right, but also a duty of Italian citizens residing abroad. Furthermore, AIRE is a requirement to benefit from various consular services (such as issuing identity and marital status documents) and exercising the right to vote abroad.
Failure to register may result in difficulties using consular services (especially passport renewal), loss of voting rights, and difficulty proving residency abroad.
The news
We have already mentioned the increase in fines; the real news is that, from January 1, 2024, there is greater active involvement of Italian municipalities. Now, they not only have the responsibility to oversee, but they also receive remuneration for the sanctions applied (“the proceeds from the sanctions in this article are incorporated into the budget of the municipality that imposed the sanction”). Now, they have a direct interest in conducting the checks.
Furthermore, the obligation was introduced for public administrations, also foreign, to exchange information with other State bodies on relevant elements related to compatriots who are presumed to actually reside abroad.
The Italian municipality is responsible for notifying registrations (or automatic cancellations) in AIRE to the Revenue Agency for tax checks on the years prior to registration (or cancellation), when you still considered yourself formally resident in Italy (or, on the contrary, enjoyed a fictitious foreign residence).
The years at risk
Verification and application of fines must be notified, under penalty of forfeiture, by December 31 of the fifth year following non-compliance. For example, someone who has lived abroad for more than 5 years and has never registered with AIRE may only be penalized for the last 5 years.
The registration request must be made within 90 days of the date of expatriation. “The fine is reduced, as long as it has not been challenged and inspection activities have not begun, to one tenth of the minimum if the declaration is submitted no more than 90 days late.”
The Budget Law does not have retroactive effect, therefore, the new penalties do not apply to those who are already registered with the AIR before the new law comes into force (30/12/2023), even if the registration took place after the effective transfer and penalizing years are present.
It’s unclear what happens to those who don’t sign up and are then “discovered.” In this case, after verification, the new legislation can be applied even in relation to the years prior to the entry into force of the new rule (although the law in force at the time of the facts, if more favorable, will be applied. A clarification would be desirable).
Finally, we remind you that it is not possible to register retroactively, but since 2019, registration begins at the moment the request is submitted, not when the result is communicated.
And now, what to do?
The recommendation is, without a doubt, to register as soon as possible. However, it is important to highlight that this regularization does not resolve the tax situation, but only administrative non-compliance and the respective penalties.
With digitalization underway and the obligation to exchange information with Inland Revenue, now in force, the possibility of the tax administration becoming aware of our situation is significantly greater.
If the situation is particularly complex, it is advisable to consult a specialist; The information provided is a guide to what's new, but does not constitute legal advice. (with information from La Repubblica)
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