Italy Publishes Decree-Law Doubling the "Flat Tax"

Yesterday, August 7, 2024, the Italian government approved a decree-law increasing the tax levied on all income and gains earned abroad from €100,000 to €200,000 for foreign nationals who opt into the "flat tax" regime.

The new decree is expected to apply only to individuals who permanently relocate to Italy (as provided for in Article 43 of the Italian Civil Code) after it enters into force. Following its publication in the Italian Official Gazette (Gazzetta Ufficiale), expected in the coming days, the decree-law may be converted into law within 60 days, during which time the Italian Parliament may amend its text.

The flat tax is a special tax regime available to foreign nationals who decide to move their residence to Italy, provided they meet all legal requirements, such as not having been an Italian tax resident in the 9 years preceding the move. The regime was created to stimulate investment and attract high-net-worth individuals to the country.

Given the significant increase in the tax burden, a case-by-case analysis, particularly of the size of the assets involved, is necessary to determine whether opting into the flat tax remains an attractive alternative.

Lorusso & Partners continues to monitor all developments on this matter and remains available to answer any questions.