Italy Doubles Flat Tax on Foreign Income for High Earners

Italy’s government announced Wednesday that it will double the flat tax on foreign income for high earners who relocate to Italy, increasing it from €100,000 to €200,000 annually.

The original flat tax, introduced in 2017, was designed to attract wealthy individuals from abroad, including expatriate Italians. This tax, applicable for up to 15 years, replaced other taxes for those who moved their tax residence to Italy.

Economy Minister Giancarlo Giorgetti stated that the new rate, which applies only to new arrivals, remains competitive but emphasized the need to avoid a race to the bottom among countries vying for high-net-worth individuals. “We are against starting a competition because countries like Italy, which have very limited fiscal space, are destined to lose,” Giorgetti said.

Since 2017, 1,186 wealthy individuals have transferred their tax residency to Italy under this scheme, although it is difficult to assess their total investment in the country. Giorgetti also referenced ongoing global discussions on taxing the super-rich, a major topic at the recent G20 finance ministers’ meeting in Rio de Janeiro.