The Italian tax law provides for several tax regimes that aim to encourage individuals to transfer their tax residence to Italy.
1) Regime “resident but not domiciled” Individuals transferring their tax residence to Italy can opt to pay a substitutive annual fix flat-tax on their foreign income, equal to € 100.000, regardless the actual amount of their foreign income. This option lasts 15 years.
2) Regime “retired new residents” Retired people transferring their tax residence to Southern Italy can opt to pay a substitutive annual flat-tax equal to the 7% of their total income. This option lasts 5 years.
3) Regime “working people moving to Italy” The compensation of employee or employer’s income is subjected to taxation only for the 30% of its total amount, on the condition that the wage earner moved to Italy. In addition, the following conditions must be fulfilled: a) individuals should not have been resident in Italy during the previous two fiscal years; b) individuals should mainly work within Italian borders. This option lasts 5 years and can be extended for another 5 year period if the individuals transferring their tax residence to Italy are parents of a minor child or a buyer of a house in Italy after their moving. The abovementioned compensations are subjected to taxation only for the 10% of their total amount if workers move to Southern Italy.
For more information contact Davide Rossetti, Partner at Morri Rossetti, Italy