The falsi residenti: audits, case law and sanctions

How an audit begins

Italian tax authorities call a person who claims a foreign residence that does not correspond to reality a falso residente (false resident). The inquiry into such cases is among the regular tasks of the Guardia di Finanza and the Revenue Agency. A typical audit begins with a mismatch in the data. A person registered with the AIRE appears as the owner of a car insured in Italy, as the holder of utility contracts with significant consumption, as the recipient of Italian income or as the parent of children enrolled in an Italian school. A guide published in September 2026 lists the indicators that the authorities use: the location of spouse and children, school enrolment of dependants, real estate, bank accounts and their movements, vehicles, professional licences, utility contracts, mail addresses and medical records.¹ The same guide names the sources: the tax register (anagrafe tributaria), the automatic exchange of financial account information, exchange of information under treaties, financial investigations under Article 32 of Presidential Decree No. 600 of 1973 and international cooperation.²

Swiss authorities may set the inquiry in motion from the other side. The migration offices of the cantons verify whether holders of residence permits actually live at the declared address. A report published in 2020 described checks in which officials, "checklists in hand", verify whether foreigners really reside in Switzerland.³ If the canton concludes that a person does not live in Ticino, it may deregister the person and revoke the permit. The loss of Swiss residence then becomes known to the Italian authorities. The same report advised persons in this situation to consider Italian tax returns and the Italian procedure of voluntary correction (ravvedimento operoso) before an audit begins. For a false resident the Swiss inquiry and the Italian inquiry reinforce each other, because each state's finding becomes evidence in the other.

Two decisions of the Court of Cassation

Two decisions of the Italian Court of Cassation show how the case law treated entrepreneurs who moved to Ticino under the law before 2024. In the first, the taxpayer was an Italian national who had moved to Switzerland in 1997 and registered with the AIRE with his family in 1998. The Revenue Agency challenged his position for the year 2004, arguing that he remained resident in Italy because he was the chief executive of an Italian furniture company and managed its three Italian plants. The Fifth Civil Section rejected the Agency's appeal by an order filed on 6 June 2022. The court held that the centre of vital interests must be assessed as a whole, including personal relations and economic interests. Proximity to the place of work could not override a residence abroad where the family, the home, the children's education and daily life were centred in the other state.⁴

The second decision concerned a criminal prosecution. The defendant, born in 1980, had been registered with the AIRE since 2007 and declared his domicile in the Mendrisiotto. He was the chief executive of an Italian motorcycle manufacturer, received a substantial Italian salary and filed no Italian tax returns for 2013 and 2014. The courts found that the evaded tax amounted to about EUR 175,000 and EUR 181,000 for the two years. The Third Criminal Section, by a judgment decided on 10 March 2021 and filed on 23 April 2021, upheld his conviction for failure to file a tax return under Article 5 of Legislative Decree No. 74 of 10 March 2000, with a sentence of one year and two months.⁵ The court held that the principal centre of vital interests is to be identified by giving priority to the place where the management of those interests is habitually exercised in a way recognizable to third parties. It found that the cancellation from the Italian registers and the registration with the AIRE were insufficient where the economic interests remained concentrated in Italy.⁶

Notes

1. Roberto Bianchi, "Trasferirsi all'estero: cosa rischia chi non parte e cambia solo residenza", FiscoeTasse, 3 September 2026, https://www.fiscoetasse.com/approfondimenti/17417-trasferirsi-allestero-cosa-rischia-chi-non-parte-e-cambia-solo-residenza.html. ↩
2. Bianchi (above). ↩
3. Mirco Galbusera, report on Swiss residence checks of foreign nationals, InvestireOggi, 18 February 2020, https://www.investireoggi.it/residenza-in-svizzera-controlli-a-tappeto-per-gli-stranieri/ ("Funzionari dell'immigrazione, liste di controllo alla mano, verificano quotidianamente se realmente lo straniero ..."). ↩
4. Corte di Cassazione, Sezione V civile, ordinanza n. 18009, filed on 6 June 2022, text at https://www.informazionefiscale.it/IMG/pdf/corte_di_cassazione_ordinanza_18009_del_2022. pdf. ↩
5. Corte di Cassazione, Sezione III penale, sentenza n. 15314 of 10 March 2021, filed on 23 April 2021, text at https://fiscomania.com/wp-content/uploads/2022/06/Cassazione-sentenza-15314-2021-omessa-dichiarazione-ai-fini-penali-rileva-il-centro-degli-affari-e-degli-interessi-vitali-in-italia.pdf. The amounts are rounded. ↩
6. Cass. pen. n. 15314/2021 (above) ("il centro principale degli interessi vitali del soggetto va individuato dando prevalenza al luogo in cui la gestione di detti interessi viene esercitata abitualmente"); Marco Bargagli, "L'esterovestizione può avere anche rilevanza penale", EC News, 28 June 2021, https://www.ecnews.it/fiscale/fisco-e-patrimonio/fisco-internazionale/lesterovestizione-puo-avere-anche-rilevanza-penale/. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.