Guida Italia al regime Lavoratori Impatriati 2025-2026

Is moving to Italy still tax-efficient for high-net-worth individuals after the reform?

Yes, moving to Italy can still be tax-efficient for high-net-worth individuals, but the old 70-90% exemption is no longer the main tool. Today, serious wealth holders usually need to choose between the new 50% impatriate regime on Italian work income and the EUR 100,000 flat tax on foreign income, often combined with careful banking and wealth structuring.

The reform means you cannot assume Italy is "cheap" across the board: you now have to match your profile (entrepreneur, C-suite, fund manager, remote tech professional, retiree) with the right regime. For high foreign passive income, the flat tax typically dominates; for high Italian employment/board income and moderate foreign income, the new impatriate regime can still be compelling.

• Typical HNWI who still wins: senior executives, fund managers, partners in professional firms relocating to Italy with large Italian-source salaries/bonuses up to around EUR 600,000, and only limited foreign portfolio income.
• Typical HNWI who may lose: globally mobile investors with modest Italian income but several million euros per year of foreign dividends, interest, or trust distributions, if they do not choose the flat tax.
• Key commercial question: will most of your future value be Italian active income or foreign investment income? Your answer often decides the optimal regime.

What changed in Italy's tax break for new residents (the impatriate regime)?

Italy has replaced the generous 70-90% exemption regime with a stricter version that offers a 50% exemption on qualifying income, capped at EUR 600,000 per year, for a maximum of 5 years. The reform applies to new tax residents starting generally from 2024 and introduces new requirements on specialization, residence history, and commitment to stay.

The impatriate regime is set out in article 16 of Legislative Decree 147/2015, heavily amended by subsequent Finance Acts and by Decree Law 209/2023 (the "Decreto Anticipi"). Below is a high-level comparison of the previous and current frameworks.

How did the old 70-90% exemption work?

• Exemption level: generally 70% of qualifying employment/self-employment income was exempt from IRPEF; in certain southern regions (Abruzzo, Molise, Campania, Puglia, Basilicata, Calabria, Sicily, Sardinia) the exemption reached 90%.
• Duration: 5 tax years, often extendable by another 5 years on specific conditions (for example, purchase of property or dependent children).
• Scope: mostly employment, self-employment, and certain business income produced in Italy; foreign-source income remained fully taxable unless other regimes applied.
• Access: open to a relatively broad class of workers relocating to Italy, provided they had not been tax resident in Italy in the prior 2 years and committed to remain at least 2 years.

What are the core changes under the new regime?

• Exemption cut to 50%: only 50% of qualifying income is exempt; 50% is taxed at ordinary IRPEF rates.
• Income cap: the 50% exemption applies only up to EUR 600,000 per year of qualifying income; any excess is fully taxed.
• Duration fixed at 5 years: no standard 5-year extension; the benefit generally ends after 5 tax years.
• Higher entry bar: you must be "highly qualified" or "highly specialized" and typically must take up a new Italian employment or directing role; the door is narrower for generic remote workers.
• Stricter residence history: non-residence in Italy for (generally) 3 tax years before the move, and a written commitment to remain tax resident in Italy for at least 5 years.
• End of 90% South bonus: the extra 90% exemption for working in southern regions is closed to new entrants.

Who keeps the old 70-90% rules?

• Individuals who already moved to Italy and validly entered the impatriate regime under the old rules (for example, arrivals up to tax year 2023) should generally retain their rights, including the higher exemptions, for the originally granted period.
• Transitional and extension rules are complex and may depend on facts like property purchases and family status; these need case-by-case analysis using current guidance from the Agenzia delle Entrate.

What are the key conditions and income caps under the new impatriate regime?

Under the new regime, 50% of your qualifying Italian employment or self-employment income is exempt from IRPEF, up to EUR 600,000 per year, for 5 tax years, if you meet the conditions. There is no relief on foreign-source income and no standard extension beyond 5 years.

The regime is primarily designed for inbound talent and senior professionals, not purely for mobile investors. The conditions are technical, and failing any of them can invalidate the relief and potentially trigger clawback.

Core eligibility requirements

Subject to ongoing legislative updates, the main requirements are:

• Non-residence history: you must not have been tax resident in Italy for at least 3 tax periods before the year of your move.
• New Italian tax residence: you must become tax resident in Italy under domestic rules (habitual abode, center of vital interests, and registration with the Anagrafe population registry for most individuals).
• Highly qualified / highly specialized: your activities in Italy must be highly qualified or highly specialized (see next section).
• Italian work relationship: you must carry out your work mainly in Italy for an Italian employer, Italian permanent establishment, or Italian-based business/self-employment activity.
• 5-year commitment: you must formally commit to remain tax resident in Italy for at least 5 tax periods.

What counts as "highly qualified" or "highly specialized" work?

The law refers to categories similar to those used for EU Blue Card and high-skill immigration, linking back to Legislative Decree 286/1998 and related regulations. While definitions evolve, typical qualifying profiles include:

• Executives and senior managers with strategic decision-making authority.
• Professionals with a university degree and specialized skills (finance, tech, engineering, medicine, legal, etc.) engaged in roles that require that expertise.
• Researchers and academics, R&D specialists, and certain tech and digital roles with demonstrable advanced qualifications.

In practice, the assessment often considers your employment contract, job description, qualifications, and sometimes your immigration status. For borderline profiles (for example, remote tech founders without a formal Italian employer), prior advice and sometimes an advance ruling are critical.

Income scope and cap

• Covered income:
  • Employment income from Italian employers or Italian permanent establishments.
  • Self-employment income from professional activities carried out in Italy.
  • Business income where you personally carry out the activity in Italy.
• Excluded income:
  • Foreign-source income (interest, dividends, capital gains, rents) remains fully taxable in Italy at ordinary rates, unless another regime applies.
  • Italian capital income and capital gains that are not "work" income are also outside this regime.
• Annual cap: the 50% exemption applies only up to EUR 600,000 of qualifying income per year. Above that threshold, the excess is taxed at full marginal rates.

Effective tax burden illustration

Assuming top IRPEF plus surcharges around 45% on fully taxable income:

• Without regime: EUR 500,000 Italian salary leads to roughly EUR 225,000 of Italian income tax (ignoring social security and local variations).
• With new impatriate regime: only EUR 250,000 is taxable; at 45% the tax is roughly EUR 112,500, implying an annual saving of about EUR 112,500 for 5 years.

What happens if you leave Italy early or breach the conditions (clawback rules)?

If you leave Italy or stop meeting the conditions before you have completed the minimum 5-year period, the tax relief can be revoked retroactively. In that case you may have to repay all the tax you saved, plus interest and potentially penalties.

The clawback rules are designed to prevent individuals from using Italy as a short-term tax arbitrage location. Before relying on the regime, you should consider your realistic time horizon, career plans, and any potential exit or relocation scenarios.

Typical clawback triggers

• Early exit: you cease to be Italian tax resident before completing 5 tax years of residence under the regime.
• Misrepresentation: your original eligibility (non-residence history, highly qualified status) is later found to be incorrect.
• Failure to maintain Italian work activity: in some cases, if you cease the qualifying work and do not replace it with another qualifying Italian role, the basis for the benefit may fall away.

What the clawback usually involves

• Retroactive taxation: the Agenzia delle Entrate can recalculate your tax as if you had never benefited from the regime from the first year of application.
• Interest: legal interest is applied to the underpaid tax for each tax year involved.
• Penalties: depending on the circumstances, administrative penalties for underpayment or incorrect returns can apply.

Illustrative example

• You move to Italy in 2025 and opt for the impatriate regime.
• You earn EUR 500,000 per year of qualifying salary in 2025, 2026, and 2027.
• The regime saves you roughly EUR 112,500 per year in tax, or around EUR 337,500 over 3 years.
• You move away and cease to be tax resident in 2028, thus not completing 5 tax years.
• The authorities can:
  • Recompute 2025-2027 tax as if the regime did not apply.
  • Assess the additional EUR 337,500 of tax plus interest for each year.
  • Apply penalties, potentially bringing the total clawback well above EUR 400,000.

This is why any relocation plan that assumes a potential exit within 3-4 years must be modelled with worst-case clawback.

How does the new impatriate regime compare with Italy's EUR 100,000 flat tax for HNWIs?

The new impatriate regime discounts Italian work income while taxing foreign income normally, whereas the EUR 100,000 flat tax (article 24-bis TUIR) leaves Italian-source income fully taxable but caps Italian tax on most foreign income at EUR 100,000 per year. For genuinely high-net-worth individuals with large foreign portfolios, the flat tax is often much more attractive.

The optimal choice depends on the ratio between Italian employment/bonus/fees and foreign investment, trust, and corporate income. In many HNWI cases, a hybrid approach is possible only by sacrificing one regime, so the structuring decision is strategic and long-term.

Key features of the EUR 100,000 flat tax (art. 24-bis TUIR)

• Who can apply: individuals who become Italian tax resident and were not tax resident in Italy for at least 9 of the previous 10 tax years.
• Foreign income covered: most foreign-source income and gains can be covered by a fixed annual substitute tax of EUR 100,000, irrespective of the amounts involved.
• Italian income: remains fully taxable under ordinary IRPEF rules.
• Family extension: option to extend to qualifying family members for EUR 25,000 per person per year.
• Duration: up to 15 tax years, subject to annual payment of the flat tax.
• Wealth and inheritance/gift relief: exemption, in principle, from Italian wealth tax on foreign assets (IVIE and IVAFE) and from Italian inheritance and gift tax on foreign assets.

Side-by-side comparison

Numerical comparison for HNWI profiles

These simplified examples show why:

• For high executives with moderate foreign income, the new impatriate regime can stay attractive.
• For true HNWIs with multi-million foreign income, the EUR 100,000 flat tax is usually far more efficient.

How do banking, investments, and cross-border structures interact with these Italian tax regimes?

Your choice of regime directly affects how you should structure bank accounts, investment portfolios, and holding vehicles when resident in Italy. Under the impatriate regime you remain a fully taxed worldwide-income resident, while under the flat tax your foreign income is functionally capped but Italian reporting and banking rules still apply.

Italian banks and foreign banks will both look at your Italian tax residence and CRS/FATCA status, so coordination between your advisors and institutions is key.

Banking and reporting under the impatriate regime

• Worldwide income taxation: all foreign income and gains must be reported in your Italian tax return and taxed at ordinary rates (or final withholding for some items).
• RW form obligations: you must report foreign financial assets and investments (bank accounts, portfolios, foreign companies, trusts) in the quadro RW of your Modello Redditi, and pay IVIE/IVAFE where applicable.
• CRS implications: foreign banks will usually report your accounts to Italy as country of tax residence; non-reporting structures are high risk.
• Practical tip: many executives keep clearly segregated "Italian" and "foreign" investment platforms, to simplify tracing and compliance.

Banking and reporting under the EUR 100,000 flat tax

• Foreign income coverage: foreign income covered by the regime is not taxed again, but you still need to manage which jurisdictions treat you as resident and how foreign withholding works.
• Reporting simplification: the law can exempt you from RW reporting and IVIE/IVAFE on covered foreign assets; however, banks still enforce KYC and CRS duties.
• Structuring opportunities: you can centralize foreign wealth in one or more jurisdictions with favorable local rules, knowing that Italian income tax will be capped at EUR 100,000.
• Interaction with holding companies and trusts: the regime can substantially change the Italian tax impact of distributions, but you must still respect Italian rules on CFCs, look-through of certain trusts, and anti-abuse provisions.

Financing, loans, and carried interest

• Carried interest and fund income: the classification of carry (as capital vs employment) is critical; for impatriates, getting more income into "work" may increase the 50% exemption; for flat tax users, having it as foreign capital income is often better.
• Shareholder loans and intra-group finance: interest flows may be foreign or Italian source depending on debtor and use of funds; this interacts differently with the two regimes.
• Private banking relationships: many Italian and international private banks now have desks specialized in flat tax or impatriate clients, combining tax planning with Lombard lending, art finance, and real estate leverage.

When should you hire a lawyer or tax expert for an Italian relocation?

You should involve a lawyer or tax expert before you sign any employment contract, board appointment, or major lease or property purchase linked to an Italian move. Once you have already become Italian tax resident or chosen a regime in your first tax return, your room to optimize drops sharply.

For HNWIs, advisory costs are small compared to the potential tax leakage or clawback risk from a poorly structured move.

Situations where expert advice is critical

• Income mix is complex: you have multiple streams such as salary, bonuses, carried interest, dividends, capital gains, trust distributions, and crypto.
• Existing structures: you already use offshore companies, trusts, or partnerships and need to know how Italy will treat them under each regime.
• Dual or multiple residence risk: you may remain tax resident or deemed resident in another country under its domestic rules or tie-breakers in tax treaties.
• Immigration links: your immigration route (for example, Blue Card, investor visa, elective residence) interacts with your tax planning and work status.
• Family and succession planning: you want to coordinate Italy's inheritance and gift tax rules, forced heirship, and matrimonial property regimes with your estate plan.

What to expect from Italian counsel

• Feasibility study: modelling of tax outcomes under no regime, impatriate regime, and flat tax, with 5- to 15-year projections.
• Structuring plan: refinement of contracts, bonus schemes, holding companies, and trust distributions to align with the chosen regime.
• Interaction with the Agenzia delle Entrate: where appropriate, obtaining an advance ruling or informal clearance, especially for complex profiles.
• Coordination with banks: working with your private bankers to implement account and custody structures that reflect your tax position.

What are the practical next steps if you are considering using these Italian regimes?

The practical path is to quantify your income and wealth, test both regimes with real numbers, decide on one coherent strategy, and then coordinate tax, legal, and banking implementation before you become Italian tax resident. Acting early preserves options and reduces clawback and audit risk.

1. Map your current and expected income:
   • Break down expected Italian vs foreign income over at least the next 5-10 years.
   • Separate work income, carried interest, dividends, interest, gains, rents, and trust distributions.
2. Estimate outcomes under each regime:
   • Have your advisor run models for:
     • No special regime.
     • New impatriate regime.
     • EUR 100,000 flat tax (with or without family extension).
   • Focus on total tax over time, not only the first year.
3. Decide on your residence time horizon:
   • If your commitment is uncertain beyond 3-4 years, assess worst-case clawback carefully.
   • If you can genuinely commit 10-15 years, the flat tax's longer duration may be valuable.
4. Align contracts and structures:
   • Negotiate employment or board packages (salary vs bonus vs equity) to fit your chosen regime.
   • Adjust corporate and trust structures so that income character (work vs capital; Italian vs foreign source) matches the preferred tax treatment.
5. Coordinate with immigration and civil-law steps:
   • Secure the correct visa or permit and understand when Italian tax residence will start.
   • Plan registration with the Italian Anagrafe and deregistration from foreign registers (for example, AIRE, UK split-year, etc.).
6. Set up banking infrastructure:
   • Open Italian accounts for domestic income and taxes.
   • Reorganize foreign banking relationships to reflect CRS reporting and your chosen regime.
   • Discuss collateral, lending, and investment strategy with your private bank under the new tax assumptions.
7. Monitor law changes annually:
   • Italy frequently amends these regimes through Budget Laws and Decree Laws.
   • Have your advisors review each year's Finance Act and Agenzia delle Entrate guidance to confirm your position.

Handled correctly, Italy can still be a tax-efficient and lifestyle-attractive jurisdiction for HNWIs. The key is to treat the new impatriate regime and the flat tax not as generic "incentives" but as tools to be engineered precisely around your banking, investment, and professional profile.