Italian Flat-Tax Regime for New Residents

Article 24-bis of the Italian Income Tax Code (TUIR)

The Italian Flat Tax Regime for New Residents is one of the most attractive tax incentives for foreigners moving to Italy, offering a simplified and predictable taxation framework for individuals who transfer their tax residence to Italy.

The regime applies a fixed annual tax on foreign income, regardless of its amount, making Italy a competitive destination for international tax planning and long-term relocation.

This Italy flat tax for expats is particularly suited to high-net-worth individuals, entrepreneurs, investors, and internationally mobile professionals seeking tax certainty, streamlined compliance, and an efficient structure for managing foreign income and global assets. As a result, the Italian tax regime for new residents has become a key tool in cross-border tax and relocation planning.

However, effective use of the Italian flat tax for foreigners requires careful upfront analysis. Eligibility conditions, the scope of income covered, the duration of the regime, and its interaction with international tax rules, asset structuring, and wealth planning strategies must be assessed in advance. A well-designed approach allows new residents to move to Italy with tax certainty, minimise exposure to risks, and ensure a compliant and sustainable fiscal position over time.

Preliminary remarks – Changes applicable from 2026

Starting from 2026, the Italian flat-tax regime for new residents provides for an annual substitute tax of €300,000 for the main taxpayer and €50,000 for each qualifying family member, while all other conditions and tax benefits remain unchanged. The increase in the amount payable inevitably reduces the regime’s attractiveness compared to the past, although it continues to offer significant simplification and tax advantages for high-net-worth individuals relocating to Italy.

Introduction

The preferential tax regime for new residents, provided for under Article 24-bis of the TUIR, is designed to attract high-net-worth individuals who transfer their tax residence to Italy. The regime allows the application of a flat substitute tax on foreign-source income, ensuring certainty and simplification in the taxation of income generated abroad.

Legal framework and case law guidance

The regime applies to individuals who transfer their tax residence to Italy pursuant to Article 2, paragraph 2, of the TUIR and who have not been tax resident in Italy for at least nine out of the ten tax periods preceding the exercise of the option. Italian citizens may also access the regime, provided the requirement of prior tax residence abroad is met.
The option entails the payment of an annual flat substitute tax on foreign-source income, identified according to the territoriality criteria set out in Article 165, paragraph 2, of the TUIR. The regime may be extended to qualifying family members pursuant to Article 433 of the Italian Civil Code, subject to the payment of an additional substitute tax for each family member. The maximum duration of the regime is 15 tax years.
Key benefits of the regime include:

• exemption from foreign asset and investment reporting obligations;
• exemption from the tax on the value of real estate located abroad (IVIE) and from the tax on the value of financial assets held abroad (IVAFE);
• non-application of Italian inheritance and gift tax with respect to assets and rights held abroad.

The regime does not apply to capital gains arising from the disposal of qualifying shareholdings realized within the first five tax years, which remain subject to ordinary taxation.
The regime ceases to apply in the event of full or partial failure to pay the substitute tax or in the event of a transfer of tax residence abroad. If the main taxpayer loses the regime, family members who opted for the extension may exercise an autonomous option for the remaining period, within the overall fifteen-year limit.
For the purposes of the regime, tax residence is assessed in accordance with the civil law concept set out in Article 43 of the Italian Civil Code, as interpreted by Italian Supreme Court case law, with particular emphasis on the location of personal and family interests.

Final remarks

In light of the recent changes to the flat-tax regime for new residents, a case-by-case evaluation is essential to assess whether the regime remains suitable and efficient. Early professional advice is recommended to properly structure the relocation and ensure full compliance with the applicable rules.

Disclaimer

This page is provided for informational purposes only and does not constitute tax, legal or professional advice. The Italian tax framework, including the flat-tax regime for new residents, is subject to ongoing legislative changes; accordingly, the applicable rules should be periodically monitored and reassessed in light of future developments.