The Italian Supreme Court has recently reaffirmed a key tax principle: the foreign income tax credit is granted only if such income is actually subject to taxation in Italy.

This means that if an income is exempt from taxation under an international double taxation treaty, the taxpayer cannot claim the tax credit.

The clarification provided by the Supreme Court aims to prevent double tax benefits and ensure the correct application of international tax regulations.

This principle is particularly relevant for individuals earning income abroad, who must carefully assess the application of tax treaties before claiming any tax credits.