Flat Tax and Impatriati Regime: Same Year or Different Years?
For moves from 2027 Italy's flat tax and impatriati regime can no longer be combined in the same year, but they can be used one after the other. How to choose the order.
Italy offers two very different incentives to people who move here. The flat tax for new residents replaces Italian tax on all foreign income with a fixed annual amount. The impatriati regime reduces tax on income from work carried out in Italy. A senior executive with a large investment portfolio abroad may want both, and for a short period Italian practice allowed exactly that.
For people moving from 2027 the law has closed the door to using both regimes in the same year, but not to using them one after the other. The order then becomes the decision. This article explains how the rules evolved and how to sequence the two regimes in practice.
Two Regimes, Two Different Targets
How the Rules Have Changed
When the flat tax was introduced in 2017, the law declared it incompatible with the impatriati regime of the time. The Revenue Agency read that incompatibility narrowly: in circular 17/E of 2017 it confirmed that the two regimes could not apply in the same year, but could be used alternately in different years.
In 2024 a new impatriati regime replaced the old one, and the flat tax rule still referred only to the old regime. In January 2025 the Revenue Agency accepted, in ruling 16, that the new regime could be combined with the incentive for researchers in the same year, as long as the same income was not relieved twice; an unpublished ruling of 19 December 2025, reported by Eutekne, applied the same logic to the flat tax. For a short period, an executive could pay the flat tax on foreign income and enjoy the 50% exemption on Italian salary in the same year.
Decree-Law 38/2026 ended that period. For people who transfer their tax residence to Italy from 2027, the flat tax is expressly incompatible with the new impatriati regime. People who moved in 2026 or earlier are not affected.
Path One: Impatriati First, Then the Flat Tax
The flat tax option must start either in the year of the move or in the following year. So if you begin with the impatriati regime, you can use it for one year only, and switch to the flat tax from year two. The ten-year test is still met, because one year of Italian residence leaves nine years of non-residence in the previous ten.
This path suits someone whose first year is dominated by Italian salary or a signing bonus, with limited foreign income, and whose foreign investment income grows afterwards. Two consequences should be priced in: in year one, foreign income is taxed at ordinary rates and foreign assets are subject to reporting and wealth taxes; and the five-year exclusion for gains on qualifying shareholdings counts year one too.
The impatriati regime also requires a commitment to remain resident for four years. Switching to the flat tax does not breach that commitment, because you remain Italian resident.
Path Two: the Flat Tax First, Then the Impatriati Regime
The reverse sequence is also possible. In ruling 159 of 22 July 2024, the Revenue Agency allowed an Italian citizen who had returned from the United States under the flat tax to revoke it and move to the impatriati regime, under the rules then in force. The impatriati regime then runs only for the years that remain in its window, which starts with the year of the move: two years on the flat tax leave three on the impatriati regime.
The price is finality. Revoking the flat tax precludes any new option, for you and for the family members included. Family members can, however, exercise an autonomous option for the remaining years of the fifteen. And the requirements of the impatriati regime must have been met from the start, including the three years of prior non-residence, counted before the move. The ruling concerned the previous regime; the same logic should apply to the new one, but there is no published ruling yet.
Four Sequences Compared
Points to Check Before Choosing
Our View
For moves from 2027 the question is no longer “which regime?” or “both?”, but “in which order?”. Run the numbers for each year of the first five, decide whether the flat tax should start in year one or year two, and treat a revocation as irreversible. A personalised computation, and in doubtful cases an advance ruling, turns the sequence into a certainty. The broader question of who the flat tax really suits, and the date of the move, are part of the same plan.
Frequently Asked Questions
Can I use the flat tax and the impatriati regime in the same year?
For people who moved to Italy up to 2026, a December 2025 ruling accepted it if the conditions of both are met. For moves from 2027, Decree-Law 38/2026 excludes it.
Can I use the two regimes in different years?
Yes. The Revenue Agency has accepted alternate use in different years since circular 17/E of 2017, and ruling 159 of 2024 confirmed a switch from the flat tax to the impatriati regime.
Can I start with the impatriati regime and switch to the flat tax later?
Only after the first year: the flat tax must start in the year of the move or the following year.
If I revoke the flat tax, can I go back to it?
No. Revocation precludes a new option for you; family members can opt autonomously for the remaining years.
How long does the impatriati regime last after a switch?
Only for the years remaining in its five-year window, which starts with the year of the move.
Which regime is better?
It depends on the split between Italian work income and foreign income, and on how both change over time. A year-by-year computation is the only reliable answer.
Avv. Marco Mesina
Founder, Move to Dolce Vita · Avvocato, Milan Bar (Ordine degli Avvocati di Milano)
Marco is an Italian tax lawyer who advises individuals and families relocating to Italy on tax regimes, residency, citizenship, real estate and succession planning. Before founding Move to Dolce Vita he worked at Watson Farley & Williams, Withers and Deloitte in Milan.
- Milan Bar
- Citywealth Top 50 Italian Advisors 2025 & 2026
- Profiled by Forbes (2024)
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