About the
FLAT TAX REGIME
Fiscal Policy
UNDERSTANDING ITALY’S ATTRACTIVE FISCAL POLICY FOR HIGH-NET-WORTH INDIVIDUALS
Italy’s flat tax regime is a cornerstone fiscal policy designed to attract affluent individuals and their families by offering a straightforward and advantageous tax structure. Introduced to simplify the tax obligations and enhance the appeal of relocating to Italy, this regime is particularly beneficial for high-net-worth individuals considering making Italy their new home.
KEY FEATURES OF THE FLAT TAX REGIME
Simplified Tax Structure
Under this regime, eligible individuals benefit from a substitute tax on their foreign income, which is fixed at a flat rate of €200,000 per year, regardless of the total amount of income generated abroad. This rate covers not only the individual taxpayer but also allows for family members to be included at an additional flat rate of €25,000 per family member per year.
Exemption from Wealth and Inheritance Tax
The regime also offers an exemption from the regular wealth taxes on foreign assets and inheritance taxes on foreign assets, significantly lowering the fiscal burden on international wealth.
Duration and Renewability
Once opted for, the flat tax regime is applicable for up to fifteen years, providing a long-term stable fiscal environment, which is ideal for individuals planning to relocate permanently.
Eligibility Criteria
TO QUALIFY FOR THIS REGIME, INDIVIDUALS MUST MEET SPECIFIC CRITERIA
Non-residency
Applicants must not have been tax residents in Italy for at least nine out of the ten years preceding their relocation to Italy.
New or Returning Residents
The regime is available to both new residents and those who have previously lived in Italy but have resided abroad for the requisite period.
THE FLAT TAX REGIME OFFERS SEVERAL KEY BENEFITS
Predictability of Tax Liabilities
Knowing in advance what your tax will be each year simplifies financial planning and investment decisions.
Financial Privacy
The regime ensures privacy concerning the amount and sources of foreign income, as it does not require detailed foreign income reporting.
Attractiveness for Diverse Income Sources
It is suitable for individuals with various types of income from abroad, including pensions, rental income, capital gains, and employment income.
WHY IT MATTERS
Choosing to opt into Italy’s flat tax regime can be a pivotal decision for high-net-worth individuals seeking to maximize their financial outcomes while enjoying the lifestyle and cultural richness of Italy. At Knotted.it, we provide expert guidance to navigate this complex decision, ensuring that every aspect of your fiscal planning aligns with your personal and financial goals.
