- Regime suited to HWNIs relocating to Italy (also Italian returnees).
- Annual fee (€ 100,000) on foreign incomes and gains.
- Possibility to submit the preliminary ruling as non-resident.
- Effects on reporting obligations, inheritance/gift taxes and property taxes: conditions for more efficient wealth and succession planning.
Italy has recently put in place a new non-dom tax system, aimed at attracting HNWIs to Italy. The new rules add to the choice currently available to individuals without fixed domicile, such as the 'res-non-dom' system in the UK, Ireland, Malta, the Swiss 'forfeit' rules and the Spanish Beckham Law.
Who can apply: The Italian non-dom regime is
available to HNWIs and anyone interested in moving to Italy. There
is only one condition to be met: you must not have lived in Italy
for the past 9 out of 10 years. You will become an Italian tax
resident, and any nationality is permitted to apply, even Italian
returnees.
The rule: Italian-source income and gains are
ordinarily taxed (under a progressive and proportional rate up to
43%). But under the non-dom regime, foreign income is sheltered
from Italian tax, provided you pay an annual €100.000 fee. The
non-dom regime may be extended to the applicant's family
members, at an additional cost of €25,000 per member.
How to apply: To become an Italian non-dom, you
must file a preliminary ruling request with the tax authorities,
disclosing your last jurisdiction of residence. The request can
also be filed as a non-resident: although you should not move to
Italy before receiving confirmation from the Italian Revenue
Agency. The non-dom procedure and requirements are clear, and the
authorities must reply within 120 days (+60 under certain
conditions) to give a green or red light. If they don't reply,
you will automatically receive a green light.
The terms: You may be an Italian non-dom for up to
15 years. Non-dom status can be revoked when you wish, and will
automatically be revoked if you fail to pay the annual fee.
Related advantages: The new regime also has an
impact on succession and gift tax, provides exemptions from
property taxes on foreign assets (a.k.a. IVIE and IVAFE) and, more
importantly, from the ordinary reporting regime under Italian law.
Moreover, the rules include the introduction of a new Investment
Visa to simplify Italy's immigration law in connection with the
new tax system. As a result, it is crucial to take advice on all of
these potentially positive effects: the non-dom regime could be a
unique opportunity to optimise your wealth planning.
Moving to Italy could be your first step for more efficient wealth
management and succession planning.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.