Guide to the Flat Tax in Italy for foreigners

1 December 2018

The Flat Tax in Italy was introduced in March 2017 to attract people who own large assets and decide to transfer their tax residence to Italy.

Those who want to transfer their tax residence to Italy will benefit from a substitute tax on income produced abroad. The option provides for the payment of a flat-rate tax of € 100,000 for each tax period exercised.

The flat rate can also be extended to one or more family members who meet the requirements. For this eventuality there is a specific indication in the tax return, referring to the tax period in which the family member transfers the tax residence or in the subsequent one.

The substitute tax, in this case, is equal to € 25,000 for each of the family members to which the effects of the same option are extended. Taxpayers in possession of the requisites can join the new regime when submitting the tax return.

The latter must refer to the tax period in which the tax residence was transferred or to the immediately subsequent one. The application can be presented even if the deadlines for establishing tax residence in Italy have not yet expired.

The payment of the substitute tax, in the amount of € 100,000, must be made in a single solution. For each tax period, the income tax balance must be paid by the due date.

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