Italy: the flat tax for new residents (Art. 24-bis)

• Amendments to the substitute tax on income earned abroad by new residents — CMS Law, 2024
• Flat tax on foreign income of new residents doubled to €200,000 — Morri Rossetti, 2024

Background

Italy introduced a flat-tax regime for new residents in 2017 (Article 24-bis of the Consolidated Income Tax Act) to compete with the UK's non-dom status and draw wealthy individuals to Milan and other cities.

The program became one of Europe's most visible tools for large-capital owners.

Problem

For an owner of global assets, tax is hard to predict: income comes from many countries, rates are progressive, reporting is heavy. Italy offers predictability — a fixed amount instead of a computation per source.

The regime is open to those who were not Italian tax residents for at least 9 of the previous 10 years.

Solution

An elector pays a single substitute tax on all foreign-source income — regardless of its size. The rate was €100,000 a year; for those who moved their tax residence after 10 August 2024 it is doubled to €200,000 (Law Decree of 7 August 2024). Residents already in the regime keep the previous €100,000.

The regime lasts up to 15 years from the year residence is acquired. Each family member can be added for a fixed €25,000 a year, extending the benefit to them. Italian-source income is taxed under ordinary rules.

Result

A single flat tax on all foreign income — €100,000 a year, doubled to €200,000 for those relocating after 10 August 2024, for up to 15 years.

Lessons learned

1. The fixed amount pays off only with genuinely large foreign income — otherwise ordinary computation may be cheaper.
2. The rate can rise: between 2017 and 2024 the level doubled, and further changes are already being discussed.
3. Italian-source income, and gains on "qualified" holdings in the early years, stay outside the benefit — the regime covers foreign income.

Frequently asked questions