Italy’s Supreme Court in ruling n. 12295 of May 19, 2010 rules in favor of the tax administration in a case in which the tax administration challenged the foreign tax residency of an Italian taxpayer and assessed taxes and penalties of about 6 billion lire on a total amount of 4 billion lire of unreported income. The taxpayer maintained the position that he had established his tax residency in Monaco and received several payments through a Dutch holding company to which he had assigned his right to use his professional image for advertising and sponsoring contracts. The tax administration argued that the taxpayer while transfering his registered address in Monaco had maintained his actual domicile in Italy, where he had most of his personal, professional and economic ties (including a house, bank accounts, memberships in local clubs). The Supreme Court accepted the tax administration’s position, holding that when Italy remains the taxpayer’s center of main interests, Italy is taxpayer’s tax residency despite the registered address has been move abroad. Italy now applies a provision according to which, when a taxpayer establishes his or her registered residency in a low tax jurisdiction, the taxpayer bears the burden to prove that the foreign residency is also the place in which the taxpayer regularly lives and maintains the main center of his or her interest.