Italy: The New Fiscal Incentive For High Net Worth Individual Now In Force

Last Updated: 10 January 2018
Article by HFG Law Firm

 According to the Italian Budget Law 2017, published in December 2016, the national economy will be placed back on track by promoting and enhancing investments from outside the Country. Herein we will focus on a new fiscal policy aiming at encouraging wealthy individuals to move their fiscal domicile within Italian borders.

The ambitious goal is going to be pursued through flat tax rate for income made abroad, an engaging measure in terms of social and economic spin offs, also providing a noteworthy, though limited, exception to the progressive tax system1.

Getting straight to the point, the fiscal incentive -for those who will take up their tax residence in Italy -will consist of a new flat tax rate of EUR 100.000, based only on the income made abroad. The incentive may be extended to other family members by paying a further EUR 25.000 per capita.

Firstly, eligible applicants will be those high net worth individuals who have not been domiciled in Italy for at least the past nine years in the last decade.

Secondly, it will be regarded as foreign income or income made abroad, income from land and properties owned and located abroad, capital gains and income related to employment or self-employment activities2. It's really interesting to notice how, in order to avoid any misuse of the flat tax rate, it shall not be considered applicable to the transfer of qualified equity interests that will remain subject to the  ordinary taxation regime3.

Furthermore, where an individual receives foreign income from more than one source, they have the option to exclude the foreign income from a few of those sources, as long as this has been declared at the time of the application4. However, it constitutes a clear derogation to the worldwide income taxation principle5 pursuant to which once a residence is elected, one should declare all income made worldwide, in order to prevent double taxation.

As to the conditions to exercise the option, the fiscal benefit has to be nominated by the deadline for the submission of tax returns and shall not exceed the duration of fifteen years starting from 2017. Additionally, given its nature to be applied regardless to the taxpayer income bracket, the full amount shall be paid in a lump sum (failing which the benefits shall be revoked).

The individual has also the option to submit a specific request to the Assessment Central Department of the Italian Tax Agency. To do this he will need to provide his personal data, current residence and information on the foreign income he receives that has been excluded from the statement6. The Agency shall check if the application satisfies all the conditions required by the Revenue Authority order and give its opinion on the case; however the contributor may exercise the option to receive the flat tax rate before receiving the Agency evaluation.

Lastly, in a check-and-balance perspective, the individual who intend to take advantage from the benefit will not be entitled to receive both, flat tax benefits and other fiscal incentives provided by the law7, at the same time.

Nevertheless, since the flat tax replaces any personal income tax normally applied to foreign income8, it may constitute a tempting alternative for those who are subject to an ordinary or less advantageous taxation system, not being only intended to attract wealthy foreigners, but also to call upon high net worth Italians to return back to their homeland.


1 The Italian Consolidated Tax Law, accepted by Decree n. 917 and dated December 22, 1986 ("T.U.I.R"), has been amended by Article 1 (par. 152 -154 and par. 157 -159) of the Budget Law 2017 (dated December 8, 2016, no. 232) by adding art. 24 bis. On March 8, 2017, the Italian Revenue Authority implemented the new Article 24 Bis T.U.I.R., thus stating the conditions for the exercise of the new fiscal incentive.

2  A quick cross-reference of T.U.I.R. provisions suggests interpreting the meaning of the expression in accordance with art. 165, paragraph 2 and art. 23, that lists the incomes to be considered as made within national territory (by non-resident taxpayers).

3 i.e. transfers of qualified equity interests made in the past five years (See article 67, par. 1, c) T.U.I.R.).

4 Accordingly, they will be entitled to a tax credit pursuant to art. 167,T.U.I.R.

5 See art. 3, par. 1, T.U.I.R.

6 See Italian Revenue Authority Measure, dated March 8, 2017, related to the exercise, modification and revocation of the option given by article 24 bis T.U.I.R.

7 See new fiscal incentives provided by Article 44, Decree n. 78/2010 and by Article 16, Legislative Decree n. 147/2015 ("Provisions related to the growth and internationalization of companies") as modified by article 1, paragraphs 149 -151 Budget Law 2017 directed to university professors and researchers and highly skilled experts. In both cases the benefits are applicable on the same fundamental ground as flat tax rate, namely taking up the fiscal residence in Italy.

8 e.g. I.V.I.E. on immovable properties, I.V.A.F.E. on financial instruments, bank account and savings account tax or gift and inheritance tax.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions