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Italy: Tax incentives expanded for certain individuals

Italy: Tax incentives expanded for certain individuals

Law Decree no. 34 (published in the official gazette on 30 April 2019) includes measures expanding an existing tax incentive program for certain individuals.


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The tax incentives are pursuant to changes to the rientro dei cervelli rules, and apply specifically for individuals who derive a large part of their income from work in Italy (rather than from foreign income).

Under the existing tax incentive program, workers must satisfy certain requirements (for instance, they must not have been a tax resident of Italy in the five-year period before relocating to Italy, and they must remain in Italy for at least two years; they must have employment with an Italian resident company or be self-employed and have income earned mostly in Italy; and they must hold a management position or be a highly qualified or specialized worker). If the individuals satisfy these conditions, 50% of their income is exempt from tax.

The new measures increase the exemption percentage from 50% to 70%, and a 90% exemption is made available for those individuals who move to one of the listed regions in the south of Italy.

Further, there is no longer a restriction limiting the tax incentive to income from employment or self-employment—business income from a new activity in Italy now also can qualify. Other restrictions have also been removed, including that eligibility is no longer dependent on the person having a management position or being a highly qualified or specialized worker. Under the new provisions, it is no longer required that the person work for an Italian company, and the required period of residence abroad before moving to Italy has been reduced from five years to two years.

Read a May 2019 report [PDF 197 KB] prepared by the KPMG member firm in Italy

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