News for Neo-residents
Moving to Italy can also be advantageous from a tax point of view: in fact, the tax regime designed for Neo-residents, i.e. foreign individuals who decide to take up residence in Italy, is in force for 2025.
Choosing Italy as their country of residence allows them to benefit from a substitute tax on all income produced abroad.
It is therefore the possibility of applying a flat tax (flat-rate substitute tax) of 200,000 euros per year on all income produced outside Italy.
Who is eligible for this measure?
In order to understand whether one qualifies for this scheme, it is also possible to contact the Italian Revenue Agency by submitting a request for clarification (interpello).
Generally speaking, in order to benefit from this facilitating regime, the foreign taxpayer concerned must
- Transfer residence to Italy
- Not have been resident in Italy for at least 9 of the last 10 years prior to the transfer
- Present the request in the tax return for the year of transfer (or at most the following year)
- Pay €200,000 per year (and €25,000 for each family member if included in the tax regime).
This tax regime remains active for 15 years and is compatible with the possibility of working or starting a business in Italy.
On what income does the flat tax apply?
The flat tax only operates on foreign income, while income earned in Italy is taxed as normal.
The flat tax also applies to:
- the tax on the value of real estate located abroad (IVIE)
- the tax on the value of foreign financial assets (IVAFE)
- tax monitoring obligations for assets held outside Italy.
On the other hand, capital gains from qualified participations realised in the first five years after the option remain subject to ordinary taxation.
Benefits for family members
It should be noted that this advantageous regime can also be extended to family members (if they meet the requirements) provided they transfer their residence to Italy.
Each family member can benefit from a flat tax of 25,000 euros per year.
Benefits for investors
The newcomer regime represents an attractive lever not only for wealthy individuals, but also for investors, digital entrepreneurs who intend to settle in Italy. The flat tax on a lump-sum basis in fact makes it possible to plan the tax burden on foreign income with certainty, making it easier to manage assets and any generational transition.
An entrepreneur with an international holding company or a professional who receives royalties, dividends or remuneration from activities carried out abroad can concentrate his operations in Italy, while at the same time retaining preferential taxation for income not generated domestically.
This regime is particularly advantageous for those with capital income or property income abroad, which would be subject to higher taxes under the ordinary regime.
Why choose Italy
As is well known, there are many countries in Europe, and elsewhere, that offer benefits for new residents.
Among the various advantages of the measure provided for by Italian law, however, is the fact that Italy, unlike other countries, does not require a minimum investment to access the regime.
Moreover, the possibility of carrying out economic activities in Italy without losing access to the benefit is guaranteed, making this regime particularly attractive for those seeking a balance between tax advantages and quality of life.
Brief recap of the tax measure for Newly Resident Citizens
- Flat tax amount: €200,000 on foreign income (correctly updated for 2025).
- Extension to family members: €25,000 per family member (if included in the scheme).
- Duration: up to 15 years.
- Requirements: not to have been resident in Italy for 9 out of 10 previous years.
- Compatibility with work or business in Italy.
- Flat tax only on foreign income; Italian income taxed ordinarily.
- Exclusion of capital gains from qualified participations in the first 5 years.
- Possibility to ask for information about one’s position at the Agenzia delle Entrate (Italian Revenue Agency) before moving.
