Italy: Approved flat taxation of foreign income

In December 2017, the Italian parliament approved a new Italian law which introduced flat taxation on the foreign income generated by new non-domiciled Italian residents. To benefit from the regime, the qualifying individuals need to submit applications to the Italian tax authorities.


Taxpayers whose applications have been approved are subject to a flat tax on the following types of income: (i) self-employment income; (ii) capital income; (iii) rental income; (iv) employment income; (v) corporate income; and (vi) other income.

Flat tax

The amount of the flat tax is EUR 100,000 for the applicant and EUR 25,000 for their relatives.


The new regime does not apply to (i) Italian-source income and (ii) capital gains from qualifying holdings which are realized five years after the exercise of the option for the regime. Such income and capital gains are taxed at ordinary rates.


To qualify under the regime, the applicant must: (i) become an Italian tax resident; (ii) have a foreign tax residence status for at least 9 out of the 10 previous tax years; and (iii) obtain a tax ruling from the Italian tax authorities


The regime became available in 2017. Once elected, the regime will run for 15 years. Taxpayers can revoke the regime at any time. The regime will terminate immediately if the tax due is not paid fully by the respective tax deadline. If the regime is revoked or terminated, the taxpayer cannot opt-in for the regime again.


To be approved, applications for opting for the new regime must satisfy the eligibility criteria. If the applications include family members, those family members must also meet the eligibility criteria. The Italian tax authorities are obliged to reply to an application within a time period of 120 days commencing on the day of submitting the application. However, this period can be extended by 60 days.

Combination with other preferential regimes

The regime cannot be combined with other preferential tax regimes, such as (i) the regime related to detaxation of self-employment and employment income for new residents in Italy and (ii) the regime related to the repatriation of researchers and scientists.

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