Italy offers four main special tax regimes for foreigners, depending on whether the income is foreign or sourced in Italy.
• Foreign income regimes:
- €200,000 flat tax for newcomers: applies to individuals relocating to Italy with mainly foreign income. Proposed investment-linked eligibility (e.g., in companies, government bonds) is not yet official.
- 7% flat tax for pensioners: available for retirees relocating to southern Italy, applies to all foreign-sourced income.
• Italian-sourced income regimes:
- Impatriate regime: targets employment or self-employment income produced in Italy.
- Professors and researchers regime: offers a 90% deduction on income earned in Italy for eligible academics relocating to Italy.
• Main consideration: the €200,000 flat tax shields only foreign income. Investments or income generated inside Italy would be taxed at standard rates, preserving the regime’s purpose.
Takeaway: Choosing the right Italian tax regime depends on the source of your income and assets; foreign workers should consider impatriate or academic regimes, while those with mostly foreign income can explore the flat tax or pensioner options.
