Flat Tax for High-Net-Worth Individuals. Tax Residency in Italy for HNWIs
Italy has a flat tax rate to attract wealthy individuals to become tax residents of the country. Typically, high net worth individuals (HNWIs) maintain liquid assets above a certain threshold. There is no set amount, but they typically have financial assets worth more than $1 million. These individuals often seek countries and tax regimes that reduce and simplify their tax liabilities.
In Italy, HNWIs who transfer their tax residency to the country, becoming new residents, can pay a flat annual tax rate on their foreign income, regardless of how much they earn. This is seen as an attractive and favorable tax regime for such individuals, encouraging them to live and invest in Italy.
Details of this flat tax regime in Italy include:
- Flat tax on foreign-sourced income for new residents, which recently increased from €100,000 to €200,000 per year
- The individual must not have been a tax resident in Italy for at least 9 of the previous 10 years.
- The flat tax regime applies to immediate family members for an additional fee of €25,000 per person.
- The flat tax can be applied for 15 years.
