Italy Residence - Flat Tax

Italy welcomes new residents with the possiblity to benefit a flat tax regime.

The Italian Flat Tax Regime

Eligibility

Individuals who have not been a resident of Italy 9 out 10 of the preceding tax years and who transfer their residence to Italy can opt to benefit from this new flat tax regime.

Flat Tax Option

Instead of declaring and paying taxes on his worldwide income an eligible individuals can opt to pay a flat tax of EUR 100.000 per year which will cover their non-Italian source income without the need to declare such income.

Italian source income will be taxed at ordinary rates.

Additional family members can be included for an additional flat tax of EUR 25.000 per year.

-     Euro 100,000 annual flat tax on non-Italian source income and gains

-     Euro 25,000 for each additional family member

-     Italian source income subject to ordinary taxation

Duration

The flat tax option is valid for 15 years after moving to Italy. While opting out is allowed any time it will not be possible to opt back in afterwards.

Scope

The flat tax covers and replaces for non-Italian source income:

•     Income tax

•     Regional surcharge

•     Municipal surcharge

•     Capital gains and dividend tax

•     Wealth tax on foreign financial assets

•     Wealth tax on foreign real estate

Estate and Gift Tax in Flat Tax Option

During the application of the flat tax regime non-Italian assets are excluded form inheritance and gift tax. Therefore only Italian assets will be subject to inheritance and gift tax.

Exemptions

Certain exemptions can apply for example in case of the disposal of substantial shareholdings within 5 years.

An individual can choose to exclude income and assets in particular countries and instead declare and pay taxes. This option might be beneficial in the light of an applicable double taxation treaty in certain situations.

Advance Ruling

It is possible - and normally advisable – to request an advance ruling before moving to Italy.

IOther preferential regimes

Other tax regimes are available for certain professionals and self-employed workers and for athletes.

Residence Permit

EU citizens can easily take up residence in Italy based on upon the European freedoms.

Non-EU citizens will need to apply for a visa, as for example the Elective or the Investor Visa