Italy has become one of Europe's most attractive destinations for internationally mobile wealth, and the Italy lump sum tax regime is central to that appeal. Designed for high-net-worth individuals who transfer their residence to Italy, it replaces ordinary progressive taxation on your foreign income with a single fixed annual payment — regardless of how much you earn abroad. This is one of several flat-tax regimes the country offers, but it is the one built specifically for substantial international wealth.
Introduced by the 2017 Budget Law and governed by Article 24-bis of the Italian Income Tax Act (TUIR), the regime — known as the regime dei neo-residenti — the Italy lump sum taxation regime, often called Italy's “non-dom” regime — lets individuals who move their tax residence to Italy pay a flat substitute tax on all foreign-source income, in place of the ordinary rates that would otherwise apply. Instead of Italian progressive taxation reaching 43% (plus regional and municipal surcharges) on worldwide income, qualifying new residents pay a fixed amount and gain substantial simplification.
It is important not to confuse this regime with the Inbound Workers Regime (impatriati): that one gives a partial exemption on income earned in Italy, while the lump-sum regime shelters income earned abroad. They address different people and different income.
The substitute tax is currently €300,000 per year on all foreign-source income, with an additional €50,000 per year for each family member included. The figure has risen as Italy has positioned itself firmly at the top of the international market: it began at €100,000 in 2017, rose to €200,000 in August 2024 (the Italy flat tax 200 000 many still search for), and reached €300,000 from 1 January 2026 (with the per-member charge doubling from €25,000 to €50,000). Whether your foreign income is €1 million or €50 million, the substitute tax stays the same fixed sum — which is precisely why the regime is built for genuinely large foreign incomes.
A point that matters enormously for anyone planning their move: each time Italy has increased the flat tax, it has protected those who were already resident. When the amount rose from €100,000 to €200,000 in August 2024, and again when it rose to €300,000 from 1 January 2026, the Italian government applied a safeguard: the higher figure applies only to those who transfer their tax residence to Italy after the new law takes effect. Anyone who had already moved their residence to Italy before that date continues to apply the amount in force at the time of their move, for the full duration of the regime, with no retroactive change.
In practice, this means the timing of your transfer of residence can be worth a great deal — potentially €100,000 per year for up to fifteen years. Establishing and documenting precisely when your residence moved to Italy is therefore one of the most valuable steps in planning your relocation, and one we handle with care through our Entry Strategy service.
This is the feature most often misunderstood. The flat tax is not a €300,000 cap on your entire worldwide income — it covers only your foreign-source income — the Italy flat tax foreign income rule: foreign dividends, interest, capital gains, rental income, directorships and business profits arising outside Italy. Any income arising in Italy remains subject to ordinary Italian taxation (see our IRPEF guide). Drawing that line correctly — what is Italian-source and what is foreign-source — is where careful advice earns its value.
The regime includes a useful planning lever: you may elect to exclude the income arising in one or more specified foreign countries from the substitute tax. Income from an excluded country is then taxed in Italy under ordinary rules, with a foreign tax credit available for tax paid there.
There are two core conditions. First, you must transfer your tax residence to Italy. Second, you must not have been an Italian tax resident for at least nine of the ten years preceding your entry into the regime. The regime is open regardless of nationality — both to foreign nationals relocating for the first time and to Italians returning after a long enough period abroad.
Italian tax residence is a practical test as much as a legal one. In broad terms you are an Italian tax resident for a given year if, for at least 183 days, you have your home and life in Italy — through registration with the Anagrafe, your domicile or habitual abode, or (since 2024) your physical presence in the country. The practical consequence matters for planning: to be treated as resident for the whole of a year, you generally need your home in Italy in time to meet the 183-day threshold — for example, in place by around 30 June 2027 to be resident for the full 2027 tax year. Timing your move around this threshold is central to entering the regime cleanly, and we set out the details in our Tax Residency in Italy guide.
The benefits reach well beyond income tax. While in the regime you are exempt from Italy's wealth taxes on foreign assets — IVIE on foreign real estate and IVAFE on foreign financial assets — and from the foreign-asset reporting obligations of the Quadro RW. There are also significant advantages for estate planning: while the regime is in force, Italian inheritance and gift tax reaches only assets located in Italy, so foreign-held assets fall outside the charge. We explore this on our Inheritance Tax page.
One technical point that is easy to miss: for the first five years of the regime, capital gains from the sale of “qualifying” shareholdings are excluded from the flat tax and taxed under ordinary rules. A shareholding is broadly treated as “qualifying” where it exceeds 20% of the voting rights (or 25% of the capital), reduced to 2% of the voting rights (or 5% of the capital) for listed companies, with disposals aggregated over any 12-month period. Founders or executives planning to sell a substantial stake shortly after relocating should model the timing before they move — not after. This carve-out can potentially be disapplied where the individual commits to remain resident in Italy for at least five years and obtains formal confirmation through an advance ruling (see Tax Rulings / Interpelli).
An individual who elects the flat tax is a full Italian tax resident — including for the purposes of the double-taxation treaties Italy has signed, which number among the most extensive networks in the world. This is a genuine advantage. As an Italian treaty resident you can invoke those treaties to obtain reduced withholding rates on income arising from the many countries with which Italy has an agreement, and Italy issues you a certificate of tax residence confirming your status. For an internationally diversified individual, treaty residence in a country with Italy's treaty network is a valuable part of the overall picture — not merely a domestic Italian benefit.
For families, two separate questions must be kept apart. On the tax side, as noted, the regime confines Italian inheritance and gift tax to Italian-situs assets. On the legal side, Italian civil law imposes forced heirship (legittima): a reserved share of the estate is guaranteed to the spouse and children and cannot be freely disposed of by will — a feature that often surprises clients from common-law countries. Under the EU Succession Regulation (No. 650/2012), you may elect for the law of your nationality to govern your succession, which can displace Italian forced heirship for the distribution of the estate. Tax and succession law must be planned together, which is why we coordinate the two on our Inheritance Tax and estate-planning services.
The regime lasts up to 15 years and is not renewable. You may revoke it at any time, and it lapses automatically if the annual payment is missed — Italy applies no exit tax on leaving the regime. Benefits already enjoyed are not clawed back, but once the regime ends, lapses or is revoked, it cannot be reactivated, and you return to ordinary worldwide taxation. Planning for what follows the fifteen years — or an earlier exit — is part of a sound long-term strategy.
The regime is elected in your Italian tax return for the first year of residence. Crucially, you do not have to wait until you have moved to gain certainty: you can file an advance ruling request — an interpello probatorio — with the Italian Revenue Agency before transferring your residence to Italy. The Agency generally replies within 90 days; if it asks for further information or documents, a further 60-day period runs from the date we provide them. The ruling confirms, in advance, both that you are eligible and how the regime will treat your specific situation — for example income from trusts, shareholdings or complex structures. Filing the interpello and liaising with the tax authorities is something we handle on your behalf (see Tax Rulings / Interpelli).
Once in the regime, three deadlines are mandatory, and missing any of them can cause you to fall out of the regime. The annual flat tax must be paid by 30 June of the following year — so, for the 2026 flat tax, by 30 June 2027 — with the option to pay by 30 July on payment of a fixed 0.4% surcharge. The annual income tax return must be filed by 30 October of the following year. We manage this calendar for you through our annual Tax Return Preparation, keeping the regime valid year after year.
The Italian flat tax does not exist in isolation — it interacts with the tax system of your home country. US citizens and green-card holders remain subject to US federal tax on their worldwide income wherever they live, because the United States taxes on the basis of citizenship. Electing the Italian flat tax does not remove the obligation to file a US return, nor reporting duties such as FBAR and Form 8938. Because the substitute tax discharges Italian — not US — liability, and interacts in a particular way with the US foreign tax credit and the Italy–US treaty, the net result for an American can differ significantly from that of a non-US client. Coordinated US and Italian advice is essential before electing — we cover this on our Tax Advisory for US Citizens page. UK citizens, following the end of the UK's own non-dom regime, increasingly look to Italy as an alternative, with their own transitional considerations — covered on our Tax Advisory for UK Citizens page.
Because the flat tax covers foreign income while the impatriati regime reduces tax on Italian employment or self-employment income, a household has, until now, been able to combine the two — for example one spouse electing the flat tax on a large foreign portfolio while the other, as a qualifying inbound worker, claims the impatriati exemption on an Italian salary. Please note, however, an important change: for those who transfer their tax residence to Italy from 2027 onward, this combination will no longer be available under the current version of the impatriati regime (Article 5 of Legislative Decree 209/2023). If a combined household strategy is part of your plan, the timing of the move becomes decisive — and should be assessed carefully in advance.
The lump-sum regime is sometimes confused with Italy's 7% flat tax for foreign pensioners, but they serve different people. The lump-sum regime suits high-net-worth individuals with substantial foreign income or assets and charges a fixed amount regardless of income. The 7% Pensioners Tax Regime is for foreign pensioners who move to smaller municipalities in southern Italy and charges a percentage of foreign income. If your income is a pension, the 7% route is likely better; if it is investment, business or mixed wealth, the lump-sum regime is usually the answer.
Consider an individual with €3 million of annual foreign income. Under ordinary Italian rates the tax could run well into seven figures; under the flat tax the Italian liability on that foreign income is a fixed €300,000 — an effective rate of around 10%, falling further as the foreign income grows. By contrast, for someone with €600,000 of foreign income the same €300,000 would represent an effective 50%, at which point ordinary taxation or the country-exclusion lever may be preferable. There is no universal answer: the only reliable one is a calculation on your actual figures, which we provide through our Personalised Tax Computation service.
The flat tax is a powerful reason to consider Italy, but rarely the only one. Italy offers something few countries can match: a collection of strikingly different regions, each with its own landscape, climate and way of life — from the lakes and cities of the north, to the hills of central Italy, to the coasts and islands of the south. Whether you are drawn to a metropolitan base, a countryside estate or a seaside home, you can build very different lives here without leaving the country. And as a member of the European Union, Italy offers the political and legal stability of a major Western democracy — a consideration that matters increasingly to internationally mobile families choosing where to establish their base.
With Italy's flat tax among the most valuable — and most scrutinised — regimes in Europe, experience matters. Avv. Marco Mesina, a member of the Milan Bar (Ordine degli Avvocati di Milano) and formerly of Deloitte and Withers, has advised dozens of high-net-worth individuals on the application of the flat tax regime — from assessing eligibility and filing advance rulings with the Italian Revenue Agency to structuring the timing of the move and coordinating the position with the client's home-country advisors. That combination of Big-Four, international-law-firm and independent practice is exactly what a regime of this size and complexity calls for.