Taxation of crew members

With summer approaching and the yachting season in full swing, discussions on issues affecting the yachting world are once again highly topical, and among these, the taxation regime for crew members is always a hot topic.

We are now preparing for the coming season, enriched by an important clarification provided by the Revenue Agency which, in its ruling no. 10 of 20 January 2026, returned to the issue of the exempt income of crew members.

We have already commented on this tax regime in the past and therefore consider it appropriate to return to the subject, emphasising the importance of the Revenue Agency's clarification.

On this point, it should be noted that crew members who are tax residents in Italy and employed on yachts flying a foreign flag are exempt from taxation in Italy on their income. In particular, income derived from work performed for a period exceeding 183 days within a twelve-month period is excluded from the tax base. This provision, contained in Article 5 of Law No. 88/2001, responds to the need to guarantee crew members – who are excluded from the so-called conventional remuneration regime – more favourable taxation on income from work carried out abroad.

In this regard, the Revenue Agency had already clarified that the favourable regime mentioned above applies regardless of the place where the work is performed. In other words, it is irrelevant whether the yacht sails mainly in international or EU waters or Italian waters, or whether it is based in an Italian or foreign port.

Moreover, in its recent Ruling No. 10/2026, referring to a principle already clarified previously (see Ruling No. 134/2020), the Revenue Agency recalled that the provision applies provided that the time requirement of “a period exceeding 183 days within twelve months” is met and confirmed that, as the rule refers to twelve months and not to the calendar year or tax period, the condition must be considered met even when the 183 days are calculated across the year, as they do not necessarily have to be 183 days falling within the same calendar year.

However, the part of the aforementioned Ruling No. 10/2026 in which reference is made to paragraph No. 1.5.7 of Circular No. 207/E of 2000 is of great importance. Among other things, it states that ‘For the effective calculation of the days spent by the worker abroad, in any case, the period of holidays, public holidays, weekly rest days and other non-working days are taken into account in the calculation of the 183 days, regardless of where they are spent’. In the opinion of the author, the above reference should be considered as an endorsement by the Revenue Agency of the application of this principle to the provision in question, even though in the specific case analysed by the Revenue Agency, the taxpayer who made the request was considered excluded from the application of the favourable regime. This conclusion is particularly relevant given that there have been several tax disputes over time in which case law has consistently held that the principle according to which holidays, public holidays, weekly rest days and other non-working days are taken into account in the calculation of the 183 days, regardless of where they are spent. It is therefore hoped that the ongoing tax disputes concerning the issue discussed here will be settled once the Revenue Agency recognises the correctness of the principle applied by crew members, which has already been upheld by the relevant case law.