Italy is welcoming HNWIs with open arms

In a bid to attract investment and human capital, Italy is offering a special package of incentives to HNWIs who become new residents. If you are a HNWI and are planning to move because of Brexit or changes to foreign tax rules, or simply because you are keen to enjoy la dolce vita,

this is the package for you. Three things are on offer: a special flat tax for your foreign income, an inheritance and gift tax exemption, and fast-tracking of visas.

Special flat tax for foreign income

The flat tax is central to the package. Regardless of the level of your foreign income, you can opt to pay an annual flat tax of EUR100,000, and a lower amount of EUR25,000 for each family member, defined very broadly as your:

  • spouse 
  • children
  • brothers and sisters
  • parents and parents-in-law
  • sons and daughters-in law.

Why is the flat tax advantageous?

  • If you become a resident of Italy and opt for the flat tax, you will benefit in two ways:
  • You will be able to remit foreign income to Italy without paying any additional tax. 
  • You will be exempted from tax monitoring obligations (RW Form) and wealth tax payments(1). Essentially, you will be taxed in Italy only on your:
  • Italian income
  • capital gains from qualifying equity interests sold within five years of opting for the flat tax. In the second case, however, those capital gains could be included in the flat tax regime after you have filed a tax ruling application demonstrating that there has been no abuse of law because of the sale and/or that you are committed to remaining in Italy for at least five years after the sale of the qualifying equity interest.