The reverse flow: Italy's regimes for new residents

The flat tax for new residents

For most of the twentieth century wealth moved from Italy to Ticino. Since 2017 Italy has competed for the same clients with its own regime for wealthy immigrants. The Budget Act for 2017 (Law No 232 of 11 December 2016) inserted Art. 24-bis into the TUIR. It allows natural persons who transfer their tax residence to Italy to pay a substitute tax of a fixed amount on all their foreign-source income in place of ordinary income tax.¹ The option is available to persons who were not resident in Italy for at least nine of the ten tax periods before the transfer. Italian nationals who have lived abroad, including in Ticino, can therefore use it on their return. It covers only foreignsource income. Italian-source income, including income from employment or business in Italy, remains taxable under the ordinary rules, and capital gains on substantial shareholdings realized in the first five tax periods are excluded from the regime.²

The amount of the substitute tax has been raised twice. It was EUR 100,000 a year from 2017. Decree-Law No 113 of 9 August 2024, the so-called Omnibus decree, raised it to EUR 200,000 for persons who transfer their residence after 10 August 2024. The Budget Act for 2026 raised it to EUR 300,000 for options exercised from 1 January 2026. The amount for each family member who joins the option was raised from EUR 25,000 to EUR 50,000. Persons who exercised the option earlier keep the amount applicable at that time.³ The option lasts for at most fifteen tax periods and can be revoked. The taxpayer exercises it in the tax return for the year of the transfer, after an optional advance ruling (interpello), and pays the tax by 30 June of the following year. Persons under the regime are exempt from the Italian reporting obligations for foreign assets in section RW and from the Italian taxes on foreign real estate (IVIE) and foreign financial assets (IVAFE). They also pay no inheritance and gift tax on assets situated abroad.⁴

In figures. According to data of the Department of Finance from the income tax returns for 2024, published in April 2026, 1,631 persons used the flat tax for new residents, including family members, and only 27 revoked their option in that year.⁵ The substitute tax rose from EUR 100,000 (2017) to EUR 200,000 (transfers after 10 August 2024) and EUR 300,000 (options from 1 January 2026). The amount for family members rose from EUR 25,000 to EUR 50,000.⁶

The exemption from inheritance and gift tax on foreign assets is the feature that most directly concerns this chapter. A wealthy person under the Italian flat tax who dies resident in Milan pays Italian inheritance tax only on Italian assets, as if he or she were not resident in Italy. Combined with the low Italian rates within the family, this makes Milan a competitive place for the last years of life of a wealthy foreigner or returning Italian. It also removes one of the traditional reasons for an Italian family to keep its head in Switzerland.

Notes

1. Redazione deQuo, "Flat tax neo-residenti" (below): "Introdotto dalla Legge di Bilancio 2017 (L. 232/2016) con l'inserimento dell'art. 24-bis nel TUIR". ↩
2. Redazione deQuo, "Flat tax neo-residenti", 21 May 2026, https://www.dequo.it/articoli/flat-tax-neo-residenti (consulted 5 October 2026), on the nine-of-ten rule and the scope limited to foreign income. TUIR, Art. 24-bis(1), Brocardi.it, https://www.brocardi.it/testo-unico-imposte-redditi/titolo-i/capo-i/art24bis.html (consulted 5 October 2026): the substitute tax "non si applica ai redditi di cui all'articolo 67, comma 1, lettera c), realizzati nei primi cinque periodi d'imposta di validità dell'opzione". ↩
3. Diritto.it, on the Budget Act for 2026, https://www.diritto.it/?p=248059 (consulted 5 October 2026); deQuo (above), on the amounts from 2017, for transfers from 10 August 2024 to 31 December 2025, and from 1 January 2026, and on earlier options. TUIR, Art. 24-bis(2), Brocardi.it (above), with notes on the amendments by Decreto-legge 9 agosto 2024, n. 113, converted by Legge 7 ottobre 2024, n. 143, and by Legge 30 dicembre 2025, n. 199 (Budget Act for 2026). ↩
4. deQuo (above). ↩
5. Milano Finanza, "In Italia ci sono sempre di più super ricchi: adesioni su del 25% per la flat tax da paperoni", 25 April 2026, https://www.milanofinanza.it/news/in-italia-ci-sono-sempre-di-piu-super-ricchi-adesioni-su-del-25-per-la-flat-tax-da-paperoni-202604251306253318 (consulted 5 October 2026); Claudio Cafarelli, "Fisco, in Italia 52mila contribuenti con regimi agevolati", QuiFinanza, 26 April 2026, https://quifinanza.it/fisco-tasse/fisco-italia-contribuenti-regimi-agevolati/975499/ (consulted 5 October 2026), on the inclusion of family members. The two articles give different growth rates against 2023 (25 and 9.1 per cent). ↩
6. deQuo (above); Diritto.it (above). ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.