As of 2 October 2026, the Italian flat tax regime for new residents (imposta sostitutiva per neo-residenti) has been updated for the 2026 tax year, introducing a new annual lump-sum of €300,000 for the primary taxpayer and €50,000 for each family member. However, the legislation maintains a grandfathering clause: individuals who transferred their tax residence to Italy before 2026 under the previous regimes (art. 43 Civil Code) remain subject to the old annual amounts of €100,000 (for transfers before 2017) or €200,000 (for transfers between 2017 and 2025). The regime allows high-net-worth individuals to pay a fixed substitute tax on all foreign-source income and gains, without reporting the underlying amounts, for a maximum of 15 years.
Key Takeaways
- Three Coexisting Regimes Based on Relocation Date: The applicable flat tax amount depends solely on when the individual established Italian tax residence (domicilio fiscale). Pre-2017 movers: €100k/year. 2017-2025 movers: €200k/year. 2026 onward movers: €300k/year. Family members always pay €50k/year (previously €25k). This creates a tiered system where timing of relocation is critical.
- Option Exercise and Irrevocability: The election must be made in the first tax return filed as an Italian resident (Modello Redditi). Once chosen, it applies for the entire 15-year period (or until loss of residence) and cannot be revoked. The tax is paid in two installments (June and November) via F24. No foreign tax credits are available, but foreign taxes paid may be deducted from the lump sum under certain double tax treaties.
- Anti-Abuse and Substance Requirements: The Revenue Agency scrutinizes the genuineness of the residence transfer (physical presence, center of vital interests). Recent case law emphasizes that mere formal registration without actual relocation triggers denial of the regime and application of ordinary progressive IRPEF rates plus penalties. Advisors must ensure clients maintain robust evidence of Italian residency.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement