Italy introduces flat tax to attract high net worth individual

The Italian Revenue Agency (Agenzia delle Entrate) published a provision that establishes “flat tax”. The option, introduced with the Budget Act (Legge di Bilancio) of 2017, provides that individuals can pay a flat tax of €100.000 on incomes produced abroad for each fiscal year.

Italian Government wants to attract human capital and the cash flow that probably will leave London after Brexit, but this provision can be a great opportunity for rich people all over the world. In particular, members of Italian government believe that Milan could be the new financial hub.

The regime is reserved to individuals who move their fiscal residence in Italy, while is not applicable to companies. It is also possible to extend the tax regime to family members with an additional flat rate of €25.000 for each person.

How to apply

Eligible taxpayers can adhere to the new regime when they present their tax returns for the fiscal year during which they moved their fiscal residence in Italy or during the immediately following year. It’s also possible to submit a prior request of ruling to the central office of Italian Revenue Agency.

The request must contain:

-       Personal data, Italian social security if already known, residence address in Italy if already resident.

-       The proof of non-residence in Italy for a period of at least nine fiscal year in the last ten years.

-       The last jurisdiction of the tax residence before to join this option.

-       Foreign states where he/she does not want to use the substitutive tax.

In addiction, the taxpayer has to compile a checklist in which he/she indicates the necessary requirements to access the regime.

The request can be delivered by hand, sent by certified mail with receipt or emailed through a certified email address. It has to be submitted within the deadline of filing of the tax return.

Mode of payment

Italian Revenue Agency provided that the payment of €100.000 must be done in one solution for every fiscal year within the deadline for the payment of the income tax balance.

Extension to family members

To extend the tax regime to family members is necessary to apply in the tax return for the fiscal year during which the familiar transfers his fiscal residence or during the immediately following year. The payment of €25.000 per additional person has to be made in one solution whitin the same deadline already mentioned.

Renewal and duration

The option is considered automatically renewed every year. Instead, all its effects will end fifteen years after the first period of validity.


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