From a tax perspective there has probably never been a better time to move to Italy, in modern history at least. In recent years Italy has been following Portugal and Cyprus’s lead and attempting to attract new residents made up of retirees, high net worth individuals and wealthy Italians who have moved or work abroad through a series of tax incentives.
So far we have had the 2017 tax incentive for high net worth individuals with a flat €100,000 per annum taxation rate. Followed by the 2019 initiative to attract pensioners and revive some of the poorer regions offering a 7% income tax rate for 5 years.
The latest overture to be rolled out for 2020 is an enhancement of a 2015 decree which allowed for a reduction in income tax by 50% for new residents from 2017 onwards, subject to conditions, and affords the possibility to pay income tax on only 30% of their income.
This new regime will apply to an employee, self-employed professional or an entrepreneur who becomes Italian resident and makes a commitment to remain an Italian resident for at least 2 years, has not been an Italian tax resident in the previous 2 years and works mostly within Italy, whether that be for a multi-national or an Italian company.
Those who meet these requirements are eligible to be taxed on only 30% of their income. Furthermore, if they reside in one of the southern regions this tax will be reduced by a further 10%.
The regime runs for a period of 5 years initially, however there are some conditions which will allow a further 5 years to be enjoyed including if the person buys a home in Italy or starts a family.
The combination of these tax incentives, the depressed housing market (click 10Y on the chart), a beautiful country with amazing food and wine, culture etc. makes Italy an attractive option to a wide range of people among those; expat pensioners looking for a nice place to retire and make the most of their pension income, high earners including footballers and the like, ultra-high net worth individuals looking to buy a vineyard or villa in desirable regions such as Tuscany or Italians who have been working abroad for some years and want to return but may have previously been put off by the tax implications.
At Valiant Wealth we can help you make the most of these regimes and provide financial planning advice to ensure that you are organised in the most efficient way possible as a new Italian resident.
Please contact us using the form below or email directly at email@example.com if you would like to discuss your situation.
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