Starting from 2017 natural persons who move their fiscal residence to Italy can opt for pay taxes on income earned abroad, providing that the interested person, for a period of at least nine years during the ten years preceding the beginning of the option validity, did not reside in Italy, for fiscal purpose. The tax applies to all income, except for capital gains generated from the cession of ‘qualified’ shares held in a company (The 2017 Budget Law – Legge 11 dicembre 2016, n. 232, art. 1, co. 152).
The total amount of tax to be paid is EUR 100,000 for each tax period in which the above option is valid, regardless of the income amount actually earned. The amount is reduced to EUR 25,000 for each tax period for each family member who is included in the visa extension. Therefore family members who earn income abroad, with the exception of capital gains generated from the cession of ‘qualified’ shares held in a company, are taxed a total amount of EUR 25,000 instead of EUR 100,000 as of the principal applicant.
Subject to a positive response from the Tax Agency, the option must be accomplished within the deadline for the declaration of income concerning the tax period in which the applicant moves his/her residence to Italy and it is operative since that tax period.
The option lasts fifteen years and can be withdrawn by the applicant. In any case, the option is automatically annulled in the case of failure to pay the tax amount entirely or partially. After withdrawal or annulment, a new option cannot be obtained. One or more family members can choose not to exercise the option, by requesting regular taxation of income earned abroad.
How many people have chosen this option? Here are the official statistics of the Agenzia delle entrate:
July 2020 – Italy also allures foreign retirees who want to choose a country other than their own to spend their old age there. How? With a sharp tax reduction on all income generated abroad; not only on pensions but also, for example, on real estate income, equity profits, annuities, etc. The tax on all these incomes will be 7% for ten years.
30 April 2019 – The Italian Government issues The Growth Act: A ten-year tax reduction for non-EU entrepreneurs and investors ready to move to Italy to invest and work.