Flat Tax for New Residents in Italy: Rules, Requirements, and 2025 Updates

Italy introduced the so-called flat tax for new residents in 2017, with the clear aim of attracting wealthy individuals, entrepreneurs, and professionals who might otherwise have chosen other jurisdictions such as Switzerland, the United Kingdom, or Portugal. This regime, set out in Article 24-bis of the Italian Income Tax Code (TUIR), allows those who move their tax residence to Italy to replace the ordinary income tax on foreign-sourced income with a fixed annual substitute tax.

When the measure was launched, the amount was established at one hundred thousand euros per year, regardless of the actual level of income earned abroad, with the option of extending the regime to family members for twenty-five thousand euros each. For many years the rules remained unchanged and proved to be effective in attracting high-profile individuals such as athletes, managers, and investors who wished to enjoy Italy’s lifestyle while securing predictable taxation on their global wealth. The situation changed in August 2024, when the government doubled the amount of the substitute tax to two hundred thousand euros per year for those transferring their tax residence to Italy from that date onwards. The contribution for family members, however, was left unchanged at twenty-five thousand euros. As a result, there are now two parallel versions of the regime: those who had already moved to Italy continue to pay the original amount of one hundred thousand euros, while newcomers are subject to the higher figure. Eligibility is based less on financial wealth and more on residence history. To qualify, an individual must not have been an Italian tax resident for at least nine of the previous ten years and must effectively transfer their residence to Italy, meaning not only formal registration but also domicile or habitual abode in the country. Unlike other regimes abroad, there are no formal requirements concerning a minimum level of assets or income, even though in practice the regime is naturally most appealing to high-net-worth individuals. The flat tax applies exclusively to income produced outside Italy, such as dividends from foreign companies, capital gains from the sale of overseas shares, rental income from properties abroad or royalties received from non-Italian sources. Income generated within Italy continues to be taxed according to ordinary rules, so employment income, profits from Italian companies or rents from domestic properties remain subject to the standard IRPEF system.

Once activated, the regime can last for up to fifteen years, provided that the individual remains resident in Italy and continues to pay the substitute tax on time every year. It can be revoked voluntarily at any time, but it also terminates automatically if the taxpayer moves abroad again or fails to meet the payment obligations.

Despite the increase to two hundred thousand euros, the Italian flat tax still represents a powerful tool for attracting foreign capital and talent. For those with substantial global income, the certainty of a fixed annual tax bill is often more valuable than chasing lower but uncertain rates elsewhere. Combined with the quality of life, cultural heritage, and investment opportunities that Italy offers, this regime continues to make the country a competitive choice for international investors and professionals considering relocation.

At Studio Brandi, we assist clients in assessing whether the flat tax is suitable for their personal and business situation, guiding them through the application process with the Revenue Agency and helping structure their global income and wealth in a tax-efficient way.

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