Italian tax regime to encourage high net worth individuals to move to Italy

Annual lump sum tax of Euro 100,000 (Euro 125,000 for couples)

Italy’s 2017 Finance Law introduced a tax regime designed to compete with the other special tax regimes around Europe that provide a special limited tax regime.   The regime is targeted at newly Italian resident high net worth individuals.  It requires a lump-sum payment of Euro 100,000 per annum in lieu of income tax at normal rates (and wealth tax)  for individuals. The new rules apply to individuals shifting their residence to Italy from FY 2018 onward.  They exclude non-Italian income and gains from the normal charge to tax, while tax will be due at the usual rates (up to 43% plus local income taxes) on Italian source income and gains.  Individuals opting for the regime will also be exempt from the requirements for the tax reporting of foreign income and assets.  There is also exemption for the annual wealth taxes on foreign real estate and financial assets (IVIE & IVAFE) and from inheritance on non-Italian assets.

A circular from the Tax Agency has been issued containing implementing procedures – the taxpayer must obtain an advance ruling for admission to the new regime – and containing a form to be submitted to the authorities for confirmation that the regime will apply. Differently from the UK’s regime there will be no ban on actually bringing funds (remittance) from abroad into Italy even where those funds have not been taxed in full.  Indeed the intention of the legislator is to foster investment in Italian businesses and assets.

If you are interested in understanding whether you qualify for this regime and discussing if it is suited to your circumstances, please contact us here.

Agenzia delle Entrate Web Page

Tax Agency list of legislative and regulatory provisions

Tax Agency Circular no. 17 of 23 May 2018

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