Do you know that the Italian tax system provides fiscal incentives for people who decide to move their residence to and work in Italy?
This so-called New Residents Tax Regime has been in place in Italy since 2017, granting foreigners and Italian expats attractive tax benefits upon their arrival or return.
![EXPATH 〜 Tax benefits for expats in Italy EXPATH 〜 Tax benefits for expats in Italy](https://www.expath.it/wp-content/uploads/elementor/thumbs/expath-tax-benefits-and-incentives-for-expats-in-italy-milan-qp9wuxnzyfrutmklxvnx8ih253tbzze34r8t47kmn0.jpg)
What does this tax incentive consist of?
Since 2019 expats can count on a tax exemption of 70% for 5 consecutive years following their relocation, which means that only 30% of a worker’s taxable income is due.
The tax exemption is further increased to 90% for those who move to the Southern regions of Italy.
This is a very favourable incentive considering that progressive income tax rates vary from 23% to 43% in Italy.
![EXPATH 〜 Tax benefits for expats in Italy EXPATH 〜 Tax benefits for expats in Italy](https://www.expath.it/wp-content/uploads/elementor/thumbs/expath-tax-benefits-for-expats-in-italy-qp9wuxnzyfrutmklxvnx8ih253tbzze34r8t47kmn0.jpg)
More specifically:
TAX BRACKET
From
To
0
€15,000
23%
€15,000
€28,000
27%
€28,000
€55,000
38%
€55,000
€75,000
41%
€75,000
43%
Duration:
As mentioned, this tax regime applies for 5 years. However, it can be extended to 10 years if certain conditions are met, e.g. buying a residential property or having an underage child.
What are the requirements to apply?
- Become an Italian tax resident
- Having worked or studied abroad
- Currently working in Italy as an employee, self-employed or entrepreneur
N.B. This regime applies to Italian inpatriates as well. Professional field and level of education are not relevant.