Fra Noi Embrace Your Inner Italian
Imagine waking up to the sound of church bells in a Tuscany hill town, sipping espresso on your balcony, and knowing your global income is neatly covered under a flat, predictable tax. For many who dream of moving to (or back to) Italy, that fantasy is now backed by something very real: a tax regime that rewards long-term planning and international mobility.
October in Italy marks the return to full rhythm after the summer holidays. The end of the year is still a distant blur, but plans begin to take shape — new routines, future moves, long-term decisions. And for some, that includes the idea of finally locating or relocating to il Bel Paese.
Italy may not have set out to compete with classic tax havens, but over the past few years it has quietly positioned itself as one of the most attractive destinations in Europe for individuals with foreign wealth or income. The key lies in Article 24-bis of the Italian Income Tax Code, a special regime that allows qualified individuals to pay a flat €200,000 annual tax on their foreign income, no matter how high their actual earnings.
There’s no need to report foreign assets. There’s no Italian inheritance or gift tax on anything held abroad. And family members can be added to the regime for just €25,000 each. It’s not just a tax break — it’s a clean, streamlined framework for those looking to build a new life in Italy without dragging their entire global portfolio into the Italian tax net.
Though the regime has been in place since 2017, it’s getting a fresh wave of attention this year following the UK’s decision to eliminate its long-standing “non-dom” status. For decades, the UK had been the go-to country for globally mobile families who wanted residence without full taxation. That’s changed. As of April 2024, newcomers to the UK get only four years of relief before facing full taxation on worldwide income. Italy, by contrast, offers a 15-year runway, and in many cases, far fewer compliance headaches.
To qualify, an individual must:
- Transfer their tax residence to Italy, and
- Not have been an Italian tax resident for at least 9 of the last 10 years.
The regime is open to individuals of any nationality — including returning Italians — and applies only to foreign-sourced income. This includes salaries, dividends, interest, capital gains, and rents earned outside Italy. However, income from Italian sources remains taxed at ordinary progressive rates, and a special rule applies to capital gains on significant shareholdings: they fall under the flat tax only if sold after five years of Italian tax residence.
Taxpayers may also choose to exclude certain countries from the regime and be taxed normally on income from those jurisdictions — for example, to claim foreign tax credits or avoid treaty complications. Once a country is excluded, however, it cannot be re-added.
For those with more complex structures or prior ties to Italy, the safest path is to file a formal ruling request (interpello) with the Italian tax authority before applying the flat tax. This provides legal certainty, protects against audit risk, and ensures clarity in how the regime applies to specific income types or family arrangements. Without a ruling, the regime can still be applied directly in the first Italian tax return, but the taxpayer bears the full burden of proof in case of future challenges.
So who actually benefits? Certainly entrepreneurs, retirees, investors, and others with global income and assets who plan to live in Italy without shifting their business operations to Italian soil. But caution is required: if a person manages a foreign company from Italy, or provides services to clients while physically in Italy, that income may no longer qualify as “foreign-sourced” — and the company itself may risk being treated as Italian tax resident based on management location.
That’s why proper planning is crucial. The flat tax can be an elegant solution — but only when there’s a clear separation between personal presence in Italy and the seat of economic activity abroad.
It’s also important to compare alternatives. For those earning most of their income in Italy, other regimes — such as the one for “impatriated” workers — may be more advantageous, offering up to 90% tax relief on Italian-sourced income for up to ten years.
Ultimately, the Italian flat tax isn’t a one-size-fits-all solution. But for the right person, at the right time, with the right structure, it’s a compelling gateway to living la dolce vita — with peace of mind, legal certainty, and long-term strategic benefits.
And if you’re thinking about it? Plan ahead. The magic of Italy may be eternal — but tax windows don’t stay open forever.
Send your questions regarding Italian law to cbortolani@aliantlaw.com and I’ll be glad to answer them.
The content provided in this Q&A column is intended solely for general informational purposes and does not constitute legal advice. The information presented here is not tailored to any specific situation or transaction and should not be relied upon as a substitute for professional legal counsel. Legal issues can vary widely based on individual circumstances and jurisdictional nuances. Therefore, it is crucial to consult with a qualified legal professional regarding your specific case or concerns. Please be aware that no attorney-client relationship is established by accessing or interacting with the information provided in this column. The column’s author and publisher disclaim any liability for actions taken based on the information contained herein.
