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The special tax regime for non-domiciled Italian residents
The 2017 Budget Law has introduced a special tax regime addressed to high net worth individuals who transfer their tax residence in Italy. Taxand Italy explores the implications of this.
Details about the procedure for the exercise, amendment and withdrawal of the election for the application of the special tax regime (hereinafter, also the Regime) have been provided with the Regulation issued on 8 March 2017, by the Italian Tax Authority (hereinafter, the Regulation). Together with the Regulation, the Italian Tax Authority also published the form (called check‐list) to be enclosed to the advance ruling (if filed) and the relative guidelines.
The special tax regime is intended to promote investment and consumption in Italy. It is applicable by election and provides for a lump‐sum substitutive tax of € 100.000 per year on the non‐Italian sourced income, as an alternative to the ordinary taxation.
The Regime is available only for "newly resident" individuals in Italy, who have been non‐tax resident in Italy for at least 9 years out of the 10 years preceding their transfer to Italy.
The election for the Regime may also be extended to the family members of these individuals by paying additional € 25.000 per year per relative.
The election can be made for fiscal year 2017 onward, for a maximum of 15 years.
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The Regime is granted for a maximum of 15 years. The option for the application of the Regime is tacitly renewed from year to year. It can be revoked at any time by the taxpayer and it is forfeited if the taxpayer fails to pay the substitutive tax within the deadline or executes partial payment.