Italy’s “lump‑sum” tax regime lets wealthy newcomers pay a flat €100,000 per year on all non‑Italian source income, regardless of the amount earned. The scheme is designed to attract high‑net‑worth individuals and their families while offering a predictable tax burden and the right to live anywhere in the country.
How the regime works
- Flat tax amount – €100,000 annually covers the taxpayer’s entire liability on foreign‑source income.
- Duration – The option can be held for up to 15 years.
- Exclusions – The flat payment does not replace Italian‑source tax, nor does it cover income from “black‑listed” countries; those remain subject to ordinary rates (up to 43 % for income above €75,000).
- Wealth and inheritance – No wealth or inheritance tax is levied for the years the regime is active.
Eligibility criteria
| Requirement | Detail |
|---|---|
| Residency transfer | Must become an Italian tax resident and have not been a tax resident in Italy for at least 9 of the 10 years preceding the application. |
| Timing | Residency must be transferred by 2 July of the year following the first fiscal year for which the regime is requested. |
| Nationality | No restriction; any citizenship is accepted. |
| Family inclusion | Spouses, children, in‑laws, parents, siblings, etc., can be added at any time for an additional €25,000 per person per year. No age or dependence tests apply. |
Tax impact
- A taxpayer earning €1 million of foreign income would pay €100,000, resulting in an effective rate of ~10 %, comparable to Bulgaria’s flat tax.
- Dividend income from foreign companies may be exempt, avoiding double taxation that occurs in many other European jurisdictions.
- The regime is most attractive for individuals with annual foreign earnings up to €2 million or more, including owners of offshore companies.
Application process
- Inquiry submission – Provide the Italian tax authorities with personal, financial, and residency details.
- Authority assessment – The tax office has roughly 122 days to respond; a lack of response is generally interpreted as approval.
- Visa and residency – After approval, obtain a visa from an Italian embassy and, upon arrival, apply for a residency permit.
Flexibility and limitations
- The option can be revoked at any time, but once cancelled it cannot be re‑activated.
- U.S. citizens who spend at least six months in Italy can claim the €100,000 flat tax as a credit against U.S. tax liability, thanks to the Italy‑U.S. tax treaty.
Practical considerations
- Cost vs. benefit – The flat €100,000 fee must be weighed against the taxpayer’s actual foreign‑source income and the potential savings versus Italy’s progressive rates (up to 43 %).
- Family planning – Adding family members increases the annual cost by €25,000 each; however, it extends the tax advantage to spouses and dependents without additional income thresholds.
- Compliance – Italian‑source income and income from sanctioned jurisdictions remain fully taxable, requiring separate reporting and payment.
Overall, Italy’s lump‑sum tax regime offers a predictable, relatively low tax burden for high‑income expatriates willing to relocate, while providing the flexibility to include family members and benefit from Italy’s lifestyle and infrastructure.
