Italy’s flat tax regime for new residents lets you pay a single annual charge of €200,000 on all your foreign-source income instead of the ordinary progressive tax, provided you move your tax residency to Italy after living abroad for at least nine of the previous ten years. The arrangement is set out in Article 24-bis of the Italian Tax Code (TUIR), lasts up to 15 years, and can be extended to qualifying family members for €50,000 each per year for those transferring residency from January 1, 2026.
Who Can Elect the Regime
The gateway rule is the “9 out of 10” test: you must have been tax-resident outside Italy for at least nine of the ten years before the year you move.1Investor Visa for Italy. Special Tax Regime for New Residents Nationality is irrelevant. Italian citizens who genuinely spent most of the last decade abroad qualify on the same footing as anyone else, and the regime is designed to attract new residents rather than returning ones.
You also have to actually become an Italian tax resident. Italy rewrote its residency criteria effective January 1, 2024, under Legislative Decree 209/2023. Under the current rules, you are an Italian tax resident if, for at least 183 days of the tax year (184 in a leap year), any one of the following applies:
- Your habitual abode is in Italy.
- Your domicile is in Italy, meaning Italy is where your personal and family relationships primarily develop. Before 2024 this test focused on business interests; it now centers on personal and family ties.
- You are physically present in Italy, with fractions of days counted as whole days.
- You are enrolled in the Italian municipal population register (anagrafe). This now creates a rebuttable presumption, which you can challenge by showing none of the other three criteria apply.
Meeting just one of these conditions for the majority of the year is enough.2Agenzia delle Entrate. Residence for Tax Purposes The rewritten domicile test matters if you plan to keep your companies headquartered abroad but relocate your family to Italy: living here with your spouse and children is enough to trigger residency on its own.
What the Flat Tax Actually Covers
The €200,000 replaces Italian tax on all income produced outside Italian territory.1Investor Visa for Italy. Special Tax Regime for New Residents Dividends from foreign companies, interest on overseas accounts, rent from properties abroad, capital gains on foreign investments, and business profits generated outside Italy all fall inside the lump sum. No brackets, no deductions, no separate calculations on any of it.
Italian-source income is a hard boundary. Anything you earn inside Italy is taxed under ordinary progressive rates (IRPEF), which top out at 43%.3Agenzia delle Entrate. Personal Income Tax Rates and Calculation If you plan to work, consult, or run a business that generates Italian revenue, that side of your income gets no relief from the regime.
The Five-Year Carve-Out for Large Shareholdings
During the first five years of the regime, capital gains from “qualified holdings,” generally stakes exceeding 20% of voting rights or 25% of capital in a company, are taxed at ordinary Italian rates instead of falling inside the flat tax. The rule blocks the obvious move of relocating to Italy and immediately selling a major foreign business at a fraction of the normal tax cost. After year five, those gains are absorbed like any other foreign income.
Cryptocurrency
Crypto gains can sit inside the flat tax when the assets qualify as foreign-source. In practice, holdings on a foreign exchange or with a foreign custodian are generally treated as foreign assets. Directly held cryptocurrency is harder to place because digital assets are borderless by nature, and the Italian authorities look at these situations case by case. Clarify this before you elect if your crypto position is meaningful.
Cost, Family Members, and Duration
The headline number is €200,000 per year for the primary taxpayer electing from the 2025 tax period onward, following Article 2 of Law Decree No. 113 of 2024. You can bring spouses, children, and other dependents under Italian civil law inside the regime by filing a formal request. For those transferring their tax residency from January 1, 2026, each family member costs €50,000 per year and gets the same treatment of worldwide foreign income as the primary taxpayer.
The regime runs for a maximum of 15 years from the date you opt in and cannot be renewed.1Investor Visa for Italy. Special Tax Regime for New Residents When that period ends you move to standard Italian taxation on worldwide income. The clock starts the year you elect, even if your first years of foreign income are modest, so timing the election to line up with the years your foreign income is highest is part of the planning.
Wealth Taxes, Reporting, and Inheritance Relief
For many high-net-worth participants, the surrounding exemptions matter as much as the income-tax break. The regime waives:
- IVIE, the 1.06% annual tax on foreign real estate.
- IVAFE, the 0.2% annual tax on foreign financial assets such as brokerage accounts, deposits, and funds.
- The standard tax monitoring obligation, meaning you do not have to disclose foreign financial assets on the RW section (Quadro RW) of the annual return. Qualified shareholdings caught by the five-year carve-out still need to be monitored.
The scale matters. A €50 million foreign financial portfolio would otherwise trigger €100,000 a year in IVAFE alone, before any income tax is calculated.
Italian inheritance and gift tax also falls away on assets located outside Italy while the regime applies. Ordinary rules tax Italian residents’ worldwide estates, so the exemption is a significant estate-planning lever across generations. Italian-situated assets remain subject to inheritance and gift tax the normal way.
Cherry-Picking Countries and Treaty Access
You can exclude specific countries from the flat tax and instead apply ordinary Italian tax rules to income from those places. The reason to do so is foreign tax credits. If a country already taxes your income there at a substantial rate, applying the flat tax means you lose the credit for what you paid. Excluding that country lets you offset Italian tax with the foreign tax credit, often leaving little or no additional Italian tax. The selection is made country by country, and unwinding it later takes planning, so the right mix is worth working out before you file.
On double taxation treaties, the Italian tax authorities have confirmed that regime participants count as Italian residents for treaty purposes and can obtain an Italian tax residence certificate. Whether the other country honors that certificate is a separate question, and some may push back if you maintain significant ties there.
Getting Into Italy If You Are Not an EU Citizen
The regime is a tax election, not a visa. EU and EEA citizens can move freely and elect on their first Italian return. Non-EU citizens need a legal basis to live in Italy first. Two routes come up most often.
The Investor Visa
Italy’s Investor Visa grants a two-year residence permit, renewable for three years, in exchange for one of the following qualifying investments:4Investor Visa for Italy. Why Invest in Italy
- €2,000,000 in Italian government bonds.
- €1,000,000 as a philanthropic donation.
- €500,000 into an Italian limited company.
- €250,000 into an innovative startup.
The investment has to be held for at least two years, and applicants need pre-approval (a “Nulla Osta”) before making it. There is no real estate option and no minimum physical presence requirement to keep the visa. The visa and the flat tax are administered separately: the visa gives you the right to reside, and the tax election is made afterward on the annual return.
The Elective Residency Visa
The Elective Residency Visa is open to non-EU citizens with substantial and stable passive income from pensions, rental income, investment returns, or annuities.5Consolato Generale d’Italia a New York. Elective Residency Employment income does not count. The income threshold varies by consulate, so confirm the current figure with the consulate handling your application. Dependent family members can be included if you show resources to support them.
How to Elect the Regime
You need an Italian tax identification number (Codice Fiscale) before anything else. From abroad, you apply through the Italian consulate; once in Italy, any local office of the Agenzia delle Entrate can issue one.6Agenzia delle Entrate. Tax Identification Number for Foreign Citizens Pull together proof of your foreign tax residency for the nine-year period as well: foreign tax returns, residency certificates, and municipal registrations all help.
The Interpello: Optional but Useful
Before committing, you can file a formal advance ruling request (an “Interpello”) with the Agenzia delle Entrate. It is optional and common for anyone with complicated international holdings. You lay out your situation and get a written opinion on eligibility and how the regime applies to you.7Agenzia delle Entrate. Glossary – Section I If the Revenue Agency does not reply within 120 days, its silence is deemed agreement with your interpretation. The Interpello is particularly worth filing when the source classification of specific income streams or the qualified-holdings rule is genuinely unclear.
The Return and the Payment
The formal election is made on your annual tax return (Modello Redditi Persone Fisiche), in Quadro NR, filed the year after you established Italian residency. There you confirm eligibility, opt into the substitute tax, and identify any countries you are excluding.8Agenzia delle Entrate. Flat-Rate Scheme The lump sum is due in a single installment by the same deadline as the balance of ordinary income tax, typically June 30 of the filing year. Italian-source income is reported and taxed separately in the same return. You repeat the process every year you remain in the regime.
How You Lose the Regime
You can revoke the election at any time without penalty. When you do, ordinary worldwide taxation resumes prospectively and every regime benefit ends. There is no going back: once revoked, the election cannot be reactivated, and your 15-year window is permanently closed.
The regime also ends automatically if you miss the annual lump-sum payment deadline. This is not treated as a correctable oversight. Miss the payment, and the arrangement is over, with standard progressive taxation on worldwide income taking effect for as long as you remain an Italian tax resident. Whichever way the regime ends, the effect is the same, so the payment date is worth guarding.