Italy’s new-resident regime allows individuals who transfer their tax residence to Italy to apply a fixed annual substitute tax on their foreign-source income, instead of being taxed under the ordinary Italian rules. This regime is mainly intended for high-net-worth individuals with substantial and diversified income generated outside Italy. To qualify, the taxpayer must generally have been non-resident in Italy for at least nine of the ten tax years preceding the transfer.
Main features: (i) Annual flat tax: €300,000 on foreign-source income for the principal taxpayer; (ii) Family members: qualifying family members may be included for an additional annual tax of €50,000 per person; (iii) Duration: the regime may apply for up to 15 tax years.
The option is exercised through the Italian tax return and requires a favourable response to a specific advance ruling request submitted to the Italian Revenue Agency.
