Italy Tax Agency Clarifies Taxation of Stock Options, Performance Shares Under Conventional Wage Regime

The Italian Revenue Agency Feb. 12 issued Letter No. 37/2026, clarifying the taxation of stock options and performance shares under the conventional wage regime. The taxpayer, an Italian citizen, had worked abroad, accruing stock options and performance shares during each employment. The taxpayer later exercised the options and received accrued performance shares and sought clarification on whether this income was already absorbed into the conventional wage regime that applied to the foreign employment income, or taxable independently in Italy. Upon review, the Tax Agency clarified that: 1) the stock options and performance shares that accrued when the employee was subject ...