Tax Incentives

Italy offers several tax incentives aimed at attracting new residents — from highly qualified professionals to retirees and investors. While some regimes have recently undergone substantial changes, they continue to provide meaningful opportunities for tax optimization if approached strategically.

At Relocating to Italy, we help you identify the most suitable regime based on your personal and professional profile, ensuring full compliance with the latest rules and a tax-efficient relocation.

Flat Tax Regime for New Residents

(Art. 24-bis TUIR)

Intended for high-net-worth individuals transferring their tax residence to Italy, this regime offers a flat tax of €200,000 per year on all foreign-sourced income, regardless of the actual amount earned. Key features include:

Reserved for individuals who have not been tax resident in Italy for at least 9 of the previous 10 years;
Optional extension to family members, with an additional €25,000 flat tax per person;
No obligation to disclose or report foreign assets (Quadro RW) or pay IVIE/IVAFE;
Valid for up to 15 years.

This regime is ideal for individuals with substantial foreign passive income (e.g., dividends, interest, rental income, or capital gains). We assist with eligibility assessment, submission of optional advance rulings, and coordination with foreign advisors.

Incentives for Inbound Workers (Post-2024 Reform)

(Art. 16 D.lgs. 147/2015, amended by Budget Law 2024)

As of 1 January 2024, the inbound workers regime has been significantly revised, narrowing its scope and limiting its benefits. It now applies only to highly qualified employees relocating to Italy under an Italian employment contract.

Eligibility requirements:

Must have been non-resident in Italy for the previous 3 tax years;
Must transfer tax residence to Italy and remain for at least 4 years;
Must possess high specialization or qualification, officially recognized in Italy;
Must work under an employment contract with an Italian company;
Must perform the activity physically in Italy for at least 183 days per year.

Benefits:

50% tax exemption on income from employment or similar activities;
Valid for up to 5 years, non-renewable;
The exemption is limited to income not exceeding €600,000 per year;
No extension for home purchase or presence of minor children (as allowed under the old regime);
No self-employed workers are eligible under the general rules (with limited exceptions for start-ups or specific professions).

We provide full support in verifying eligibility, reviewing contracts, and ensuring proper application of the regime from year one.

Tax Incentives for Foreign Pensioners

(Art. 24-ter TUIR)

Italy offers a special tax regime for foreign pensioners who decide to move their tax residence to certain qualifying municipalities, mostly located in Southern Italy or smaller towns. The regime is designed to attract retirees and stimulate local economies by encouraging long-term settlement in underpopulated areas.

Key features:

A flat 7% tax rate applies to all foreign-source income, including pensions, dividends, interest, and rental income;
Valid for up to 9 years from the first year of tax residency;
The taxpayer must transfer their tax residence to a municipality with fewer than 20,000 inhabitants in a qualifying region (e.g., Sicily, Calabria, Sardinia, Apulia, Abruzzo, Basilicata, Molise);
No obligation to declare foreign assets (Quadro RW) or pay IVIE/IVAFE;
The individual must have been non-resident in Italy for at least 5 years prior to the move

This regime is particularly attractive for retirees receiving foreign pensions, especially from public or private sources outside Italy. It provides an opportunity to enjoy Italy’s lifestyle while benefiting from a highly favorable and simplified tax framework.

We assist clients in:

Identifying eligible municipalities;
Verifying pension classification and documentation;
Registering residency and activating the 7% regime through the Italian tax return;
Managing ongoing compliance and renewals.

Other Exemptions and Local Incentives

In addition to national tax regimes, some Italian regions and municipalities — particularly in the south and in low-population areas — offer further benefits, including:

Local tax reductions (e.g., IMU exemptions for first-time buyers or newly resident individuals);
Cash bonuses or grants for individuals and families who move to underpopulated towns;
Support schemes for professionals or entrepreneurs relocating their business to Italy (e.g., “Resto al Sud” incentives).

These benefits are often subject to annual funding and local approval. We monitor all available programs and assist with the application process, including business planning and compliance with local eligibility rules.