“Impatriates” – 70% Tax break to attract “human capital” to Italy – Update 2019

2019 Changes

The Italian Government has recently modified the special tax regime designed to encourage the movement of “human capital” to Italy (lavoratori impatriati”).

  • The new regime increases the exempt portion to 70% – so only 30% of gross salary/net profit  is liable to income tax.  100% of salary continues to be liable to social security under normal rules
  • The regime applies for five consecutive accounting periods, until revoked or until the conditions for the relief cease to apply
  • The requirement to have a University decree/highly specialized job has been abolished
  • The requirement to perform services for an Italian company (or foreign company belonging to an Italian group) has been abolished. The geographical requirement is now that the work is performed mainly in Italy
  • Now to qualify you must have been tax resident outside Italy in the two tax periods preceding the year in which you transfer to Italy
  • You must commit to reside in Italy for at least two years
  • The exempt portion is 90% (so 10% taxable)  if you take up residence in one of the regions of Abruzzo, Molise, Campania, Puglia, Basilicata, Calabria, Sardinia, Sicily

The income tax exemption applies for a further five tax periods to an individual worker

  • with at least one minor (under 18) or dependent  (over 18 but in full time education) child; and
  • who becomes the owner of at least one residential property in Italy after moving (or  12 months prior to becoming tax resident).
  • during the extension period, the tax exemption drops to 50%, but goes to 90% for impatriates with at least three minor or dependent children.

If you are an employee you need to make a written letter of request to your employer.  For the self-employed (and those employees who have not presented the letter of request in time) the benefit can be claimed in the relevant annual tax return which will generate the refund either via your payslip, a payment from the authorities or credit to offset future tax liabilities. We can assist with the refund claim.

If you would like advice on whether you qualify for the relief and/or a pre-compiled copy of the letter you need to send your employer please click here

Legislation and guidance (in Italian)

Italian Tax Agency Website


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