Italy's Flat Tax for New Residents Increased to €200,000
August 2024: Decree-Law 113/2024 doubles Italy's flat tax for new residents to €200,000 a year for moves after 10 August 2024. Who is affected and what stays the same.
On 9 August 2024, Italy published in its Official Gazette a decree-law that changes the price of its best-known incentive for wealthy newcomers. The annual flat tax on foreign income for new residents, introduced in 2017 at €100,000, doubles to €200,000 for people who move to Italy from now on.
The regime itself does not change: what changes is its cost, and only for new arrivals. This article explains what the decree says, who is affected, what remains the same and what to watch in the coming weeks.
What the Decree Says
Article 2 of Decree-Law 113 of 9 August 2024, in force from 10 August 2024, amends article 24-bis of the Income Tax Code. The substitute tax on foreign income rises from €100,000 to €200,000 for each tax year of the option. The increase applies to individuals who transfer their residence to Italy, within the meaning of article 43 of the Civil Code, after the decree’s entry into force. The €25,000 due for each family member included in the option is not changed.
Who Is Affected
The decisive date is the transfer of residence under the Civil Code, meaning the place where a person has their habitual abode. People who were already flat tax residents, and people who had already moved their residence to Italy by 10 August 2024 but have not yet exercised the option, remain at €100,000. Everyone who moves after that date pays €200,000 for the whole duration of the regime.
Because the test refers to civil-law residence rather than to the tax year, the date on which a move can be documented matters. Registration with the municipality, a lease or deed, and the actual move of the family are the evidence that fixes it.
What Does Not Change
The structure of the regime is untouched. The flat tax still replaces Italian income tax on all foreign income and gains, including income from companies in low-tax jurisdictions, with one exception: gains on qualifying shareholdings sold in the first five years remain taxed under the ordinary rules. Holders are still exempt from reporting foreign assets and from Italian wealth taxes on them, and the rules on controlled foreign companies do not apply. Gifts and inheritances during the regime are taxed in Italy only on Italian assets. Italian income continues to be taxed in the ordinary way. Countries can still be excluded from the option, and the regime can still be extended to family members.
Why the Increase
The decree itself says little about its reasons. The change was widely read in two ways: as a response to criticism that €100,000 had become low compared with the foreign incomes of the people using the regime, and as a way to raise revenue without touching its structure. Either way, the effect is to narrow the regime to people with very large foreign incomes, while keeping a fixed and predictable cost.
Who Still Benefits at €200,000
Under ordinary Italian rates, with a top marginal rate of 43% plus local surcharges, a €200,000 flat tax begins to pay off at a few hundred thousand euro of foreign income a year, depending on the type of income and the foreign tax credits available. For investment income taxed at 26%, the break-even point is around €770,000. Above those levels, every additional euro of foreign income is covered at no extra Italian cost. For entrepreneurs, investors and family offices with foreign incomes in the millions, the regime remains highly attractive.
What to Do Now
For people who had already decided to move, the decisive question is whether their civil-law residence was transferred before or after 10 August 2024, and how that can be proved. For those still planning, the analysis is the same as before, at a higher price: compare the €200,000 with ordinary taxation on your actual foreign income, consider the timing of a move within the tax year, and, where your past ties with Italy are complex, consider an advance ruling.
Our View
Doubling the price changes who the flat tax is for, not what it offers. For families with very large foreign incomes, €200,000 remains one of the most efficient and predictable regimes in Europe; for those closer to the break-even point, the decision now deserves a careful computation.
Frequently Asked Questions
How much is Italy's flat tax after August 2024?
€200,000 a year for people who transfer their residence to Italy after 10 August 2024, under Decree-Law 113/2024. Family members included in the option pay €25,000 each.
Does the increase apply to people already on the flat tax?
No. People who moved their residence to Italy by 10 August 2024 keep €100,000 a year.
Has anything else changed in the regime?
No. Eligibility, the 15-year duration, the coverage of foreign income and the exemptions from foreign asset reporting and wealth taxes are unchanged.
Can the new amount still change?
The decree must be converted into law within 60 days, and Parliament may amend it during conversion.
Is the flat tax still worth it at 200,000 euro?
For people with very large foreign incomes, yes. For investment income taxed at 26%, the break-even point is around 770,000 euro a year.
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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