Concierge service for Italy New Residents Flat Tax. You hire My Latin Life; local immigration specialists (and licensed counsel where required) file on your behalf. The deliverable: a completed filing or account setup — not advice-only — not advice, not a DIY packet.
Italy’s New Residents Flat Tax regime allows individuals relocating to Italy to pay a single fixed substitutive tax of €100,000 per year on all foreign-source income — regardless of the actual amount. Whether you earn €500,000 or €5,000,000 abroad, the Italian tax on that income is capped at €100,000. The regime runs for up to 15 years and can be combined with any Italian residency permit. Our team advises on eligibility, structuring, and the application process.
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Program Overview
Introduced in 2017 under Art. 24-bis of the Italian Tax Code (Testo Unico delle Imposte sui Redditi, or TUIR), the New Residents Tax Regime was designed to attract high-net-worth individuals to Italy by capping the Italian tax cost of their foreign income at a predictable fixed amount. It is not a low-rate regime — €100,000 is a significant sum. The power of it is the certainty and the cap: a person with €3,000,000 in foreign investment income effectively pays a ~3.3% Italian tax rate on that income. For individuals with very large foreign income streams, the math is compelling.
The regime applies only to foreign-source income. Italian-source income (work performed in Italy, Italian rental income, dividends from Italian companies) is taxed under standard Italian progressive income tax rates. The two systems run in parallel.
Who Benefits Most
- High-net-worth individuals with large investment portfolios generating foreign dividends, interest, or capital gains
- Business owners with foreign companies generating passive income
- Retirees with large foreign pension or annuity income
- Individuals who have sold a business and hold significant investment capital abroad
- Family offices looking to establish an Italian base for the principal
- Anyone relocating from a high-tax country (US, UK, Germany, Canada) with substantial foreign income who wants the lifestyle of Italy without the full tax burden
The regime is not designed for individuals whose primary income comes from working in Italy. Italian-source employment income, self-employment income, and Italian business income are always taxed at standard progressive rates. The flat tax applies exclusively to the foreign component.
Key Conditions and Limitations
- Prior residency bar: You must not have been an Italian tax resident in at least 9 of the 10 tax years preceding the application. Most people relocating from abroad will easily meet this condition.
- Capital gains on qualifying participations (5-year rule): Capital gains on qualifying shareholdings (generally >20% of voting rights or >25% of capital in unlisted companies) generated during the first 5 years of the regime are excluded from the flat tax and taxed normally. This is the most important limitation to plan around if you are selling a business.
- Annual opt-in required: The flat tax is elected on your annual Italian tax return (Dichiarazione dei Redditi). If you do not elect it in a given year, you lose the regime permanently — there is no re-entry after a missed year.
- Revocation: You can choose to exit the regime at any time (for example, if your foreign income drops significantly and the €100,000 tax becomes disproportionate). Once revoked, you cannot re-enter.
- Country ring-fencing: It is possible to exclude specific countries from the flat tax substitution — meaning gains from investments in those excluded countries are taxed normally while all other foreign income benefits from the flat rate. This can be useful when treaty benefits in a specific country are more favorable than the flat tax treatment.
Combining the Flat Tax with an Italian Residency Visa
The New Residents Flat Tax is a tax regime, not a visa. You still need a qualifying Italian residency status to take advantage of it. The combination that makes the most sense depends on your profile:
- Italy Investor Visa + Flat Tax: Ideal for HNW investors. The investor visa provides residency with no minimum stay requirement; the flat tax caps foreign income tax at €100,000/year. The most powerful combination on the page.
- Elective Residence Visa + Flat Tax: For individuals with large passive foreign income who want to actually live in Italy. The elective residence visa requires spending the majority of your time in Italy.
- EU citizen + Flat Tax: EU citizens (and those with Italian citizenship by descent) do not need a visa to reside in Italy — they simply register as residents. They can elect the flat tax regime immediately upon establishing fiscal residency in Italy.
What MLL Does
- Eligibility assessment: confirm you meet the prior residency bar and that the flat tax makes financial sense given your income profile
- Advance tax ruling (interpello) coordination: we can assist in obtaining a binding ruling from the Italian Revenue Agency (Agenzia delle Entrate) confirming your eligibility — this is optional but provides certainty
- Coordination with our Italian tax attorneys to structure your affairs before relocating (critical for the 5-year capital gains exclusion if you are holding business equity)
- Annual tax return preparation to ensure the flat tax election is made correctly each year
- Residency visa coordination if you also need an Italian residence permit (see Italy Investor Visa)
Ready to Move Forward?
Our licensed Italian immigration attorneys review every case before submission. Book a call to confirm your eligibility and map out your path.
Frequently Asked Questions
Does the flat tax apply to my US income if I am a US citizen?
This is the most important limitation for US citizens to understand. The US taxes its citizens on worldwide income regardless of where they live (citizenship-based taxation). Moving to Italy does not eliminate your US tax obligation. What the Italian flat tax does is cap Italy’s claim on your foreign income at €100,000. The Italy-US tax treaty and the Foreign Tax Credit mechanism will determine how much actual additional tax you pay on top of what you already owe the IRS. For most US citizens with significant foreign income, the combined US + Italian liability with proper planning is still substantially lower than staying in a high-tax US state, but it requires careful analysis. Book a consultation and we will model your specific situation.
What happens after 15 years?
After the 15-year maximum term expires, your foreign income becomes subject to standard Italian progressive income tax rates (up to 43% plus regional and municipal surcharges). Many individuals use the flat tax window to restructure their affairs so that Italian-source income becomes their primary stream (e.g. through Italian investments or a locally incorporated holding company) before the regime ends. This is something our tax attorneys plan around from the beginning of the engagement.
Can my spouse also elect the flat tax?
Yes. Family members who relocate to Italy and establish Italian tax residency can each elect the flat tax regime at an additional cost of €25,000 per person per year. Each family member makes their own election independently, and each person’s prior residency bar is assessed individually. This is relevant if your spouse has significant foreign income in their own name.
Do I need to physically move to Italy to use this regime?
Yes. You must establish Italian tax residency, which generally requires spending more than 183 days per year in Italy, or registering with the Italian Registry of Residents (Anagrafe), or having your primary domicile in Italy. Simply holding an Italian residence permit without actually residing there does not establish Italian tax residency. The Italy Investor Visa has no minimum stay for the permit, but to claim the flat tax you need to be a bona fide Italian tax resident.
Is there an advance ruling option to confirm eligibility?
Yes. Italy’s Agenzia delle Entrate offers a binding advance ruling process (interpello preventivo) where you submit your facts and receive a written confirmation of eligibility before you relocate. This is optional but provides certainty, particularly if your residency history is complex or you have specific country exclusion requests. MLL can coordinate this process with our Italian tax attorneys.
