Italian Flat-Tax Regime for New Residents (Art. 24-bis TUIR) – 2026 Update

Briefing note prepared by Daniele Giacalone – ACA and Tax Solicitor – SLTG & Partners

Overview of the Italian Flat-Tax Regime for New Residents

The Italian flat-tax regime for new residents, governed by Article 24-bis of the Italian Income Tax Code (TUIR), is a preferential tax framework designed to attract high-net-worth individuals (HNWIs) who transfer their tax residence to Italy.
The regime allows taxpayers to opt for a lump-sum substitute tax on foreign-source income, ensuring tax certainty and significant simplification.

2026 Changes to the Flat-Tax Regime

Starting from 2026, the Italian flat-tax regime introduces higher fixed amounts:

• €300,000 per year for the main taxpayer
• €50,000 per year for each qualifying family member

All other conditions and tax benefits remain unchanged. While the increase in the annual substitute tax reduces the regime’s attractiveness compared to previous years, it continues to offer relevant tax advantages and compliance simplifications for individuals with substantial foreign income and assets.

Eligibility Requirements and Access Conditions

The regime applies to individuals who:

• transfer their tax residence to Italy under Article 2(2) of the TUIR;
• have not been tax resident in Italy for at least 9 of the previous 10 tax years.

Italian citizens may also access the regime, provided that prior tax residence abroad can be demonstrated.

The option is valid for a maximum period of 15 tax years and may be extended to qualifying family members under Article 433 of the Italian Civil Code.

Tax Treatment of Foreign Income

By opting for the flat-tax regime, foreign-source income—identified according to the criteria set out in Article 165(2) of the TUIR—is subject to a single annual substitute tax, regardless of the amount of income generated abroad.

However, capital gains from the disposal of qualifying shareholdings realized within the first five tax years are excluded from the regime and remain subject to ordinary Italian taxation.

Key Tax Benefits

The Italian flat-tax regime for new residents provides several significant advantages, including:

• exemption from foreign asset reporting obligations;
• exemption from IVIE and IVAFE on foreign real estate and financial assets;
• exclusion of foreign assets from Italian inheritance and gift tax.

Loss of the Regime

The regime ceases to apply in the event of:

• full or partial failure to pay the substitute tax;
• transfer of tax residence outside Italy.

If the main taxpayer loses the regime, family members who opted in may exercise an independent option for the remaining period, within the overall 15-year limit.

Tax Residence and Case Law Principles

Tax residence for the purposes of Article 24-bis TUIR is assessed in accordance with Article 43 of the Italian Civil Code, with particular emphasis on the location of personal and family interests, as consistently affirmed by Italian Supreme Court case law.

Final Remarks

Given the recent legislative changes and the increased cost of the regime from 2026, a case-by-case tax analysis is now essential to determine whether the Italian flat-tax regime remains an effective planning solution. Early professional advice is strongly recommended to properly structure the relocation to Italy and ensure full compliance with the applicable rules.

Further Insights on the Italian Flat Tax and Relocation Incentives

You may also be interested in the video dedicated to the regime applicable until 2025, prior to the Italian 2026 Budget Law, and to other tax regimes for relocating to Italy, useful for understanding the evolution of the Flat Tax for new residents and Italian tax incentives for new residents.

Disclaimer

This article is provided for general informational purposes only and does not constitute tax, legal, or professional advice. The Italian tax system is subject to ongoing legislative changes and reforms; therefore, the applicable rules should be periodically monitored and reassessed in light of future developments.