The Regime

Introduced by 2017 Italian budget law. Available to individuals who become Italian tax resident and haven’t been Italian tax resident in 9 of the past 10 years.

How it works:

• €100,000/year (~USD$115,000) flat tax substitutes Italian tax on ALL foreign-source income

• €25,000/year additional flat tax per qualifying family member

• Available for 15 years maximum

• Italian-source income taxed normally at regular Italian rates

For someone with €10 million/year foreign investment income, this is transformative; Italian tax reduces from potentially ~€4 million to €100,000.

Note: Italy’s flat tax only really becomes attractive from a tax planning perspective if you are currently paying more than €100,000 (in most Western countries this would be individuals making USD$350,000+ from non-Italian income sources. If you’re making below this, as many young nomads/solo-entrepreneurs are, the reality is somewhere like Panama or Dubai is probably a better option for this stage of your life.

Who Has Used It

Reports suggest thousands of High Net Worth individuals have relocated to Italy under the regime. Notable public examples have included:

• Christian Angermayer (biotech investor, German)

• Nassef Sawiris (Egyptian billionaire)

• Various finance and tech executives

• Football players

Milan and Rome are common bases; Florence, Venice, Portofino also popular. Then of course there’s the thousands of small villages with very cheap old mansions that can be bought and restored to create truly special antique-style country/summer houses.

Why It’s Attractive

For someone with substantial foreign investment income:

• Predictable annual tax cost

• Italy’s lifestyle, culture, cuisine, access to the best of luxury (there’s a reason Italian brands set the standards and lead trends of luxury)

• EU access and subsequent EU passport (citizenship through naturalisation)

• 15-year runway (long enough for meaningful life planning)

• Easier eligibility than some other regimes

• No day-count based tax-year mechanics needed for foreign income (i.e. 183-days not strictly required - visiting just once a year is fine if you meet the other criteria)

The Requirements

1. Genuine relocation of home-base to Italy

2. Italian tax residency established

3. Not previously Italian tax resident in 9 of past 10 years

4. Annual €100K payment (regardless of foreign income amount)

5. Real Italian ties (housing, community)

Remember that Italian-source income will be taxed at standard rates.

The Trade-Offs

Italy’s non-flat-tax rules are complex and cumbersome. Standard Italian personal tax is high (progressive to 43% + regional/municipal). Italian bureaucracy is notoriously slow. Italian-source income (Italian rental property, Italian employment, Italian business) still taxed at standard rates.

For most High Net Worth clients of FTR, the flat-tax path is the whole financial benefit, and without it, Italy would be an expensive lifestyle destination.

Modern Alternatives

Similar regimes elsewhere:

• Greek €100K non-dom regime: essentially same structure, Greek variant

• UK FIG regime (post-2025): 4-year exemption for genuinely new residents

• Portugal (former NHR): closed 2024

• Cyprus non-dom: 17-year exemption on foreign dividends/interest

• Malta Global Residence Programme: €15K minimum taxItaly’s flat-tax is competitive against these on scale, duration, and lifestyle for those valuing Italian culture.

• Uruguay: culture is a combination of Italian and Latin American (~44% of Uruguayans are Italian descendants, the rest are mainly Spanish & French), similar weather to mediterranean, American timezone, decade-long 0% tax holiday available for new residents.