Change to the taxation of crew members on board vessels

Once again, we return to the subject of the taxation of crew members on board vessels, given that the relevant regulations have recently been amended by Article 2-bis of Decree-Law No. 38 of 2026, as converted into Act No. 88 of 2026, which introduced into Article 3, paragraph 3, of the Italian corporate income tax code a new provision for exclusion from the personal income tax base. In particular, the provision is primarily intended to harmonise the tax regime for workers employed on board ships flying a foreign flag with that applicable to ships registered in the International Register or in the registers of European Union or European Economic Area Member States, as listed in the specific equivalence register maintained by the Ministry of Transport and Infrastructure. The amended tax regime provides, on the one hand, that income derived from employment by seafarers on board ships and resident in Italy is excluded from the taxable income base and, on the other hand, that the provisions relating to the taxation of ‘conventional’ remuneration do not apply to such income in relation to employment income earned abroad on a continuous basis by individuals resident in Italy.

Income derived from employment by maritime workers resident in Italy, who are on board for a period exceeding 183 days within a twelve-month period on ships flying a foreign flag – other than those registered in the registers of the (or flying the flag of) Member States of the European Union or the European Economic Area, used exclusively for international commercial traffic in connection with international maritime transport or similar activities, and listed in the specific register maintained by the Ministry of Transport and Infrastructure. For the latter, in fact, which are excluded from the new provision, different favourable tax regimes apply, as provided for by specific legislative provisions.

As regards, however, crew members on board vessels and ships flying a foreign flag used for pleasure boating, to whom the provisions of the amended Article 3 of the TUIR apply, nothing should change compared with the previous regime. In view of this, the recent pronouncements clarifying the criteria for calculating the 183 days may therefore still be considered valid. In particular, reference is made to Ruling No. 10/2026, in which the Italian Revenue Agency stated that the provision applies provided that the time requirement of “a period exceeding 183 days within a twelve-month period” is met, and reiterated that, as the provision refers to twelve months and not to the tax year or tax period, the condition must be deemed to be met even when the 183 days cover two calendar years, as they do not necessarily have to fall within the same calendar year. Of great significance, too, is the section of the aforementioned Ruling No. 10/2026 which refers to paragraph 1.5.7 of Circular No. 207/E of 2000, which states, amongst other things, that “For the actual calculation of the number of days the worker has spent abroad, the 183-day period shall, in any event, include holiday periods, public holidays, weekly rest days and other non-working days, regardless of where they were spent”.

It is therefore clear that, in practice, it is of primary importance to establish a record-keeping system for counting the days of actual presence and work – as outlined above – on board, in order to be able to promptly demonstrate to the tax authorities that the 183-day time requirement has been met.

Last but not least, it is worth noting another clarification provided by the Italian Revenue Agency – which also applies under the new regime discussed here – regarding the fact that the exclusion from the IRPEF tax base applies regardless of the place where the work is carried out. In other words, it is irrelevant whether the yacht on which the crew member is employed sails mainly in international, EU or Italian waters, or whether it is moored in an Italian or foreign port. This is precisely because the vessel on which crew members are employed constitutes a specific circumstance distinct from the geographical location to which tax obligations are generally linked.

For the sake of completeness, it should also be noted that the preferential regime under discussion here relates exclusively to the Italian domestic tax system. This does not therefore preclude – even in a purely ‘academic’ scenario – the possibility that another country (for example, the country in whose shipping register the vessel is registered or where the operating company is based) might, under its own domestic legislation, subject the income of the Italian crew member on board to taxation. In this case, the Italian domestic legislation providing for the exemption would not apply, as it operates solely within Italy and cannot preclude taxation in other third countries. It could also happen – possibly in addition to the scenario referred to in the previous point – that the conditions for applying the exemption from taxation of income in Italy are not met. In all these cases, as in all others where a hypothetical conflict of laws arises that would lead to the same income being taxed by two different countries, two regulatory instruments may, in principle, be applied, namely (i) the tax credit for taxes paid abroad and (ii) international double taxation treaties, which, through specific clauses, aim to eliminate or at least reduce this risk of double taxation, including with specific reference to the tax position of crew members.

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• Article 2-bis of Decree-Law 38/2026 contains a provision under which the excluded income of crew members on board vessels is nevertheless taken into account when determining eligibility for benefits of any kind, including those of a non-tax nature, where income criteria apply.

• Although the provision has been reworded, it is considered that the previous clarifications, as well as established case law and administrative practice, remain valid in relation to the assessment of the 183-day condition.

• Remuneration received by crew members on board yachts flying a foreign flag does not constitute taxable income in Italy provided the conditions described in the body of the article are met; consequently, there are no formal obligations incumbent on the taxpayers concerned in this regard, although it is advisable for them to retain all documentation necessary to demonstrate that the conditions for the application of the preferential regime are met.