Special tax regimes in Italy

Due to its history, culture, geography, cuisine, and quality of life, Italy is one of the most popular places in the world to live. Italian taxes, on the other hand, are a common factor that causes many people to pass on the relocation.

When you permanently move to Italy, you will be considered an Italian resident and will be required to pay taxes on your worldwide income. However, there are two favorable special fiscal regimes that can make the move more appealing: “Flat Tax for Wealthy Foreigners (HNWI) new residents” and “Inbound workers regime”.

High Net Worth Individuals (HNWI) are typically discouraged from changing their tax domicile to Italy because doing so would have a negative impact on their personal wealth. Italian income tax rates are among the highest in the OECD and, in order to address this issue, the Italian government in 2017 implemented a Flat Tax, a new tax structure designed specifically for new citizens of Italy.

To qualify, you must have not been resident in Italy for 9 of the last 10 years and meet residency requirements. HNWI new residents are required to pay a lump sum of €100,000 on all foreign income and €25,000 for relatives. This does not include incomes generated in Italy and must be paid on June 30th of each year.

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