Current Tax Benefit
At the moment, high-net-worthindividuals who transfer their fiscal residence to Italy can choose to subjecttheir foreign-sourced income to a substitute tax of €200,000, provided theyhave not been fiscally resident in Italy for at least nine years out of the tenpreceding the access to the regime in question.
Another relevantbenefit concerns the exemption from filling out the RW form (tax monitoring)and the related payment of tax on foreign assets.
This regime canalso be extended to the beneficiary's family members, provided they also meetthe mentioned requirements, by increasing the substitute tax by €25,000 per eacheligible relative.
It should benoted that, for the first five tax periods, the regime does not apply tocapital gains realized from the sale of qualified shareholding.
Expected Changes
The draft BudgetLaw for FY 2026 provides for a reduction of the benefit through the followingincreases:
- The substitute tax increases from €200,000 to €300,000
- The annual amount to be paid for extending the regime to family members increases from €25,000 to €50,000
These changeswill apply to individuals who transfer their civil residence to Italy startingfrom from January 1st, 2026.
Transition toNew Regime
Given thesechanges, it is important to note that individuals transferring theirresidence to Italy by the end of 2025 will be able to benefit from the previousregime. To this end, the key element is the date of transfer of civilresidence as resulting by the “Register of the Resident Population”.
OtherRequirements
All otherconditions of the regime remain unchanged, specifically concerning:
- Maximum duration of 15 years, with loss to the full benefit in case of non-payment or partial payment of the substitute tax
- Payment of the substitute tax on a yearly lump-sum basis by the due date for the income-tax on individuals
