Over the past 15 years, Italy has introduced, updated, and renewed a variety of tax incentives designed to attract talent, retirees, and investors from abroad. Although the scope and stability of these benefits can change frequently — which isn’t ideal for long-term planning — they remain valuable tools for anyone considering moving to (or returning to) Italy.
Attracting international talent is a topic close to my heart. Making Italy attractive to professionals living and working abroad is key not only to counter so-called “brain drain” of Italian people moving abroad (in Italian, we use the term “flee of brains”, a term I dislike as no-one is fleeing, people are just assessing opportunities and challenges of leaving vs staying in Italy), but also to enrich Italy’s economic, social, and cultural fabric.
When I personally moved back to Italy in 2018, I took advantage of one of these schemes — a tax relief that initially offered tax cuts for 5 years, later extended to 10 years thanks to an unexpected legislative change. A pleasant surprise in an ever-evolving legal landscape!
Whether you are an international professional with global experience, an expat looking to return under favorable conditions, or a foreign retiree dreaming of la dolce vita, this article will guide you through the main tax regimes currently available. In particular, we’ll cover:
- Overview of Italy’s Key Tax Schemes for New or Returning Residents
- The Impatriates Regime: Updated Guide for 2025
- Flat Tax for New Residents
- Special Regime for Foreign Retirees – 7% Flat Tax for 10 Years
- Do You Qualify for These Schemes?
- How Do These Schemes Affect Investments?
- Are There Benefits for Buying Property?
- Moving to Italy? Get Professional Support
Overview of Italy’s Key Tax Schemes for New or Returning Residents
Italy offers several incentives to make moving (or moving back) more attractive, including:
| Scheme | Who It’s For | Main Benefits |
|---|---|---|
| Impatriates Regime | Qualified workers returning or relocating to Italy | Up to 60% exemption on employment income (for 2025) |
| Flat Tax for New Residents | High-net-worth individuals with foreign income | Flat tax of €200,000 on foreign income |
| Special Regime for Foreign Pensioners | Foreign retirees moving to small towns in Southern Italy | 7% flat tax on foreign pension income |
Let’s look at each in more detail, starting with the most popular: the Impatriates Regime.
The Impatriates Regime: Updated Guide for 2025
This tax scheme encourages highly qualified workers — both Italian citizens returning and foreign nationals relocating — to become Italian tax residents after living abroad. The law has recently changed to make eligibility stricter and reshape the benefits. Here’s a summary of what you need to know.
1. The “Old” Regime (For Moves Until December 31, 2023)
If you moved your tax residence to Italy by December 31, 2023, you may still benefit from the more generous old rules:
Key Requirements
- Not being tax resident in Italy for the 2 (or in some cases, 5) years before moving.
- Establishing Italian tax residence for at least 2 years.
- Carrying out your work mainly in Italy (employment, freelance, or business).
Benefits
- 50–70% exemption on income earned in Italy (meaning you pay tax only on 30–50%).
- Exemption of up to 90% if you move to certain Southern regions.
- Initial duration: 5 years, extendable for another 5 if you meet extra conditions (e.g., having minor children or buying a home in Italy).
For moves before April 30, 2019, an extension fee applies.
2. The “New” Regime (For Moves From January 1, 2024)
As of 2024, the new rules are stricter:
Key Requirements
- Not tax resident in Italy for the previous 3 tax years (or 6–7 years for intra-company transfers).
- Maintain tax residence in Italy for at least 4 consecutive years.
- Work mainly in Italy.
- Hold a high level of qualification or specialization (e.g., managers, researchers, skilled technical professionals).
Benefits
- 50% exemption on Italian employment/freelance income (pay tax only on the remaining 50%).
- The benefit applies up to €600,000 of annual income.
- The exemption rises to 60% if you have at least one minor child or have/adopt a child during the benefit period.
Duration
- Fixed 5 years.
- No automatic extension (unlike the old regime).
3. Quick Comparison: Old vs New
| Feature | Until 2023 | From 2024 On |
|---|---|---|
| Tax Exemption | 50–70–90% | 50–60% |
| Duration | 5 years + 5-year extension (conditions apply) | 5 years, no extension |
| Prior Non-Residency | 2/5 years | 3 years (6–7 for intra-group) |
| Qualification Required | Not required | Highly qualified/specialized |
| Income Cap | None | €600,000/year |
Flat Tax for New Residents
Italy’s Flat Tax regime (Art. 24-bis of the Italian Tax Code) was created to attract wealthy individuals who earn significant foreign income. First introduced in 2017, it was updated in 2024.
Key Requirements
- You must not have been tax resident in Italy for at least 9 out of the 10 years before moving.
- You must become an Italian tax resident and apply formally to the Tax Agency within the legal deadlines.
Benefits
- €200,000 flat annual tax (increased from €100,000 in 2024) on all foreign-source income, no matter how large.
- €25,000 extra per additional family member you include.
- Valid for up to 15 years, non-renewable.
Other Advantages
- No inheritance or gift tax on foreign assets.
- No obligation to declare covered foreign assets in Italy’s special tax report (Quadro RW)
Special Regime for Foreign Retirees – 7% Flat Tax for 10 Years
This regime targets foreign retirees who move to small towns in Southern Italy (population under 20,000). The goal is to boost local communities while offering a very competitive tax rate.
Key Requirements
- You must receive a foreign pension or equivalent benefit.
- You must not have been tax resident in Italy for the past 5 years.
- You must relocate from a country that has an administrative cooperation agreement with Italy (tax treaties, EU regulations, etc.).
- You must reside in a qualifying town in Southern Italy (updated lists are published annually).
Benefits
- 7% flat tax on all foreign-source income.
- No requirement to report covered foreign assets in Quadro RW.
- Duration: up to 10 years.
Do You Qualify for These Schemes?
To check your eligibility for the Impatriates Regime or Flat Tax, you’ll need careful personal, tax, and financial analysis. A certified Italian tax advisor (commercialista) plays a vital role in verifying requirements, interpreting current laws, and handling your filings. A financial advisor in Italy can help assess wider impacts on wealth planning, investments, and potential inheritance issues. Combining these two experts is the best way to make well-informed, sustainable, and tax-efficient decisions.
How Do These Schemes Affect Investments?
The three regimes treat investment income differently:
- Impatriates Regime: Investment income is not included in the tax benefit. It’s taxed at standard Italian rates.
- Flat Tax for New Residents & Retirees: Foreign-source income (including investment income) is covered by the flat tax — meaning no extra Italian tax is due, with some exceptions.
Because rules can be complex, it’s essential to plan your portfolio carefully with both a tax advisor and a financial planner.
Are There Benefits for Buying Property?
Many people ask if there are special tax breaks for buying a home when moving to Italy. The answer: no dedicated incentives exist just for foreign or returning residents. The old Impatriates Regime offered an extended tax break if you bought a home, but this option ended with the new rules in 2024.
However, Italy’s standard First Home Bonus still applies. Any resident (Italian or foreign) who buys their main home can benefit, provided they meet the requirements. Key benefits include:
- Reduced registration tax (2% instead of 9%) if buying from a private seller.
- Reduced VAT and fixed mortgage/cadastral fees.
- To qualify, you must establish residence in the same town as the property within 18 months of purchase.
Moving to Italy? Get Professional Support
If you’re considering moving to Italy, a solid financial plan is crucial to make the most of tax benefits and protect your wealth long-term. Feel free to reach out for a personalized consultation — together, we can analyze opportunities, risks, and the right investment strategies for your new life chapter.
