Tax incentives for expats

International taxation support

Personal tax is not easy to deal with and the issues get complicated when more than one jurisdiction are involved.

Moving abroad quite often does not get off from the home country tax obligations; this aspect needs to be handled with extreme care to avoid missed or undue payments.

The Italian government has signed international agreements with most countries to avoid this kind of issues over the years, thanks to our deep knowledge of both the Italian tax law and the interationl treaties, I can ensure that your tax burden will be optimized in detail.

I can rely as well on a capillary network of professionals in several foreign countries to support my clients.

The lavoratori Impatriati tax relief is intended for employees and freelancers who transfer their tax residence to Italy.

The tax break provides for the 50% de-taxation of employment and self-employment income to the maximum extent of 600,000 Euros annually. The relief applies for five tax periods, starting from the one in which tax residence is transferred to Italy. The deduction percentage increases to 60 percent if the worker moves to Italy with a minor child or in the event of the birth (or adoption) of a child during the period of use of the scheme.

A detailed analysis of each individual case must be carried out to verify its conditions.

TAX RELIEF FOR WORKERS RELOCATING TO ITALY - “IMPATRIATI” SCHEME

Retire in italy - flat tax 7% for new pensioners

This tax scheme provides a very attractive 7% flat tax rate on any income of pensioners who move their residence to Italy and:

Have not been resident for tax purposes in Italy for at least 5 years before the year when they become Italian tax residents;

  1. Transfer their tax residence in one of the municipalities having a population not exceeding 20.000 units in any region of Southern Italy (i.e. Abruzzo, Molise, Campania, Apulia, Basilicata, Calabria, Sardinia end Sicily) or in a municipality with fewer than 20.000 inhabitants in specified seismic areas;
  2. Have previously been residents in countries with which there is a double taxation agreement or an agreement on the exchange of information for tax purposes.
  3. The duration of the tax scheme is 10 years starting from the year when the pensioner becomes an Italian tax resident.

A detailed analysis of each individual case must be carried out to verify its conditions.

Tax benefits for researcher and professors

Professors and researchers who move to Italy their residence for tax purposes can benefit from reduced taxation on income from employment and self-employment generated in Italy for teaching and research.

In particular, for 6 years since the transfer of the tax residence in Italy, the remuneration received contributes to the formation of employee or self-employed work income at 10% of their amount.

The benefit is extended to 8, 11 or 13 tax periods under certain conditions.

The incentives are granted to professors and researchers who carry out their activities in Italy and meet the following requirements:

  • Holding a University degree or equivalent qualification
  • Have been resident abroad (not occasionally)
  • Have carried out documented research and teaching activities abroad for at least two consecutive years, at public or private carry out teaching and research in Italy
  • Acquire the residence for tax purposes in Italy

A detailed analysis of each individual case must be carried out to verify its conditions.

Italian new resident tax scheme (high-net-worth individuals)

This tax regime is intended for individuals transferring their residence to Italy and envisages a substitute tax on their foreign income.

This beneficial regime aims at enhancing investments and attracting to Italy high-net-worth individuals.

This tax regime is available for “newly resident” individuals in Italy, who have been non-tax resident in Italy for at least 9 years out of the 10 years preceding their transfer to Italy.

The incentive regime may be also extended to the family members of these individuals.

High-net-worth individuals transferring their tax residence to Italy are enabled to apply a substitute tax to their foreign income, amounting to €100.000 for each fiscal year, instead of the Italian income tax. Therefore, this taxation represents an alternative to the application of the ordinary taxation and the option is valid for a period of 15 years.

The election for the regime may be extended to family members through the payment on their foreign income of a substitute tax amounting to €25.000 per member.
A detailed analysis of each individual case must be carried out to verify its conditions.

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Francesco Barillaro

Dottore Commercialista – Revisore Legale

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