Italy offers a tax regime for new residents that provides a substitute tax on their foreign income. This scheme aims to increase investment and attract high net worth individuals to Italy. Italy”flat tax” on foreign-sourced income for new residents

Who can access the regime?

The scheme is available to natural persons who have not been resident in Italy for tax purposes for at least 9 years in the last 10 years before moving to Italy. The regulation can also be extended to the family members of these people.

 

Advantages

Wealthy individuals who transfer their tax residence to Italy have the option of paying a replacement tax on their foreign income of 200,000 euros per year instead of Italian income tax. This taxation represents an alternative to the application of ordinary taxation and the option is valid for a period of 15 years. The choice of regulation can be extended to family members by paying a substitute tax of 25,000 euros per member on their foreign income.

By Law Decree No. 113 of 9 August 2024, published in the official gazette on 10 August 2024, the Italian government doubled the “flat tax” on foreign-sourced income for new residents from EUR 100,000 to EUR 200,000, introduced by the previous government to attract wealthy investors.

Tax return and application

Taxpayers can access the scheme by submitting a tax ruling to the Italian tax authority or by using the alternative tax option in their tax return.

Inheritance and gift tax

Persons who change their tax residence must pay inheritance and gift tax only on real estate and assets located on Italian territory.

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Tax regime for new residents in Italy

Goal
The tax regime for new residents in Italy is intended to increase investment in Italy by attracting high net worth individuals.

Eligible persons
Natural persons who have not been resident in Italy for tax purposes for at least 9 years in the last 10 years before moving to Italy are eligible. The regulation can also be extended to family members of these people.

Advantages
By Law Decree No. 113 of 9 August 2024, published in the official gazette on 10 August 2024, the Italian government doubled the “flat tax” on foreign-sourced income for new residents from EUR 100,000 to EUR 200,000, introduced by the previous government to attract wealthy investors.

Example
A wealthy person who transfers his tax residence to Italy has a foreign income of 800,000 euros per year. Under the tax regime for new residents in Italy, she only has to pay a substitute tax of 100,000 euros per year on this income.

application
To benefit from the scheme, the taxpayer must submit an application to the Italian tax authority. The application must be submitted within 90 days of entering Italy.

Inheritance and gift tax
Persons who transfer their tax residence to Italy must pay inheritance and gift tax only on real estate and assets located on Italian territory.

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We’ve helped hundreds of people move their businesses overseas, legally reduce their taxes, and become dual citizens. We are focused on high-net-worth individuals and their families as well as corporations wishing to invest their offshore companies or even secure their wealth in offshore financial centers around the world. We will help you to find the best solution for setting up an offshore or onshore company. Another special area of our full-service consulting is the investment opportunity and solution in Europe, especially in the Balkans, Africa, Asia, UAE, the Caribbean and the Pacific.

If you are looking for it, please feel free to contact us. We create a holistic plan that serves your purpose.

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GCI UNIT Worldwide by TCME Worldwide Group, designs and implements customized, holistic strategies for successful investors and entrepreneurs to legally reduce their tax bills, diversify and protect their wealth, invest abroad, gain a second citizenship and live a freer life worldwide to lead.

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