Guidance from the tax authority aims to clarify an optional tax regime for new individual tax residents of Italy. Under the new regime, individuals that are new tax residents of Italy can elect to be subject to a flat-tax regime if: (1) transfer their tax residence to Italy; and (2) have had foreign residence status for at least nine of the last 10 fiscal years.
Under the flat-tax regime, individuals who previously have not been tax residents of Italy and who transfer their tax residence to Italy will pay, instead of ordinary tax, a flat-rate substitute tax of €100,000 per year on all their non-Italian sourced income (and a flat tax of €25,000 for eligible family member). Under the flat-tax regime, foreign income subject to the flat tax includes:
The circular provides that to qualify for the flat tax, the individual must actually move to Italy. The authorities may remove an individual from the register if, after visiting the person’s residence at appropriate intervals, the authorities cannot find the person at the address.
The circular further provides:
Read a June 2017 report [PDF 174 KB] prepared by the KPMG member firm in Italy
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