Those who decide to transfer their residence to Italy can access various tax opportunities. Here is a simple guide to understanding the main incentives provided.
Moving to live in Italy can be a choice driven by many reasons: quality of life, cultural heritage, climate or the beauty of the landscapes. To encourage the arrival of new residents from abroad, the Italian tax system also provides some preferential regimes, designed for pensioners, qualified workers and people with income produced outside the country.
These are opportunities that can make the transfer more convenient from a tax point of view, provided certain fundamental conditions are met: among the most important, not having been tax resident in Italy for a certain period of time before the transfer.
Let us look in a simple way at the main incentives currently available.
FLAT TAX FOR PENSIONERS WHO TRANSFER TO ITALY
One of the most interesting incentives concerns pensioners who receive a pension from abroad and decide to transfer their residence to Italy.
In this case it is possible to opt for a preferential tax regime which provides for the payment of a fixed taxation of 7% on income produced abroad, valid for a maximum period of nine years.
To access the benefit it is necessary to meet some requirements:
- receive a pension paid by a foreign entity;
- transfer residence to municipalities with fewer than 20,000 inhabitants located in certain areas of Southern Italy or in territories affected by seismic events;
- not have been tax resident in Italy in the five years preceding.
In recent years the scope of the municipalities that can benefit from this measure has been expanded, also including several centres located in the earthquake-affected areas of central Italy.
Among these are, for example, some locations in Umbria such as Norcia, Cascia, Preci, Sellano, Scheggino, Vallo di Nera and Cerreto di Spoleto, small villages immersed in nature and rich in history.
TAX INCENTIVES FOR WORKERS RETURNING FROM ABROAD
Another favourable regime is designed for workers who transfer their tax residence to Italy after a period spent abroad.
This incentive is aimed at both employees and self-employed professionals and provides for a significant reduction of the taxable base: in practice only 50% of employment income produced in Italy is taxed. The incentive applies for five years, starting from the tax period in which the transfer of residence takes place.
To access the regime it is necessary to meet some conditions:
- not have been tax resident in Italy in the three years preceding the transfer;
- commit to maintaining tax residence in the country for at least four years;
- carry out one’s work activity mainly in Italy;
- possess qualified or specialised skills.
In some situations the benefit can be even more advantageous: for example, in the presence of minor children, the portion of income taxed may be further reduced, making the regime even more favourable. This measure has been designed to attract professionals and qualified workers who choose to live and work in Italy.
REGIME FOR NEW RESIDENTS WITH INCOME PRODUCED ABROAD
There is also a tax regime designed for people with income generated outside Italy who decide to transfer their residence here. Those who meet the requirements can choose to pay a lump-sum substitute tax on income produced abroad, regardless of its amount.
To access this option it is necessary to:
- transfer one’s tax residence to Italy;
- not have been resident in the country for at least nine of the previous ten years.
The tax provided for by this regime is equal to €300,000 per year, with the possibility of extending the option also to family members, for whom an additional reduced tax is provided. The regime can be maintained for up to fifteen years and is particularly interesting for people with international activities or assets.
AN OPPORTUNITY FOR THOSE WHO WISH TO LIVE IN ITALY
In recent years Italy has introduced various measures to make transferring to the country more attractive from a tax point of view.
Pensioners, qualified workers and new residents from abroad can therefore benefit from tax regimes designed to accompany the return or transfer to Italy, contributing to the development of territories and to the enhancement of many areas of the country. For those who dream of a new life among historic villages, hills and unique landscapes, knowing these opportunities can represent the first step to transform a life project into a concrete choice.
If your project is to live or invest in Italy, the professionals of Great Estate can guide you in the search for the ideal property and offer qualified support.
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