Your Golden retirement in Italy

Italy aims to appeal to pensioners and compete with countries like Portugal which has attracted about 100,000 new residents (including many Italians) whose spending power has added 1.2% to the country’s GDP amounting to $3.5 Billion per annum.

• Individuals receiving foreign pensions or similar annuities, resident outside Italy for tax purposes during the last 5 calendar years (the regime certainly applies to individuals who have never been resident in Italy) and becoming resident in a town with a population of less than 20,000 in the regions of Sicily, Sardinia, Campania, Basilicata, Abruzzo, Molise or Puglia;
• There are no citizenship limitations.

How does this regime work?

• Individuals who want to relocate their tax residency in Italy will be subject to a 7% flat tax on any non-Italian sourced income and assets (including pensions, property income, capital gains), even if remitted to Italy;
• Italian- sourced income is subject to tax under current Italian legislation;
• The regime lasts maximum 10 calendar years.

• Exemption from Italian disclosure of foreign assets and from payment of related Italian wealth taxes;
• Individuals can remit funds to Italy without any limitation;
• The option applies only to some foreign countries; income arising from countries not covered by the option would be subject to the ordinary income tax rates and a foreign tax credit would be available;
• Individuals can benefit from the Universal Healthcare system.

• Exemption from Italian Inheritance and Gift Tax relating to assets and real estate owned abroad.
• Exemption from Italian disclosure of foreign assets and from payment of relative Italian wealth taxes.
• Individuals can remit funds to Italy without any limitation.
• Allowance for Double Tax Treaty income tax exemptions or reduction.

• Upon express application in the first Italian tax return after the individual moves his or her residence to Italy.

Limitations

• Inheritance and gift taxes are not covered by the 7% flat tax;
• The option cannot be extended to family members (unless such members currently hold foreign pensions);
• The Italian tax authorities have not issued any information about whether it is possible to renew the option after 10 years.

This new regime has made Italy one of the lowest tax jurisdictions for expat pensioners in Europe.

In view of this fact combined with low property prices in the regions where this regime is available and Italy being a highly attractive place to retire to in terms of lifestyle (food, wine, landscapes, culture, weather etc…) we expect to see increasing interest and uptake of this regime over the coming years.

The actual convenience of the 7% flat tax should be assessed on a case-by-case basis, taking into account the individual asset/income situation, the family context and the country of origin. This procedure requires detailed tax and legal planning in the individual’s home country and in Italy.

HNWItaly can carefully analyse the eligibility requirements, domestic tax law and current assets and estate structure, in order to assess how the new regime affects tax position and overall tax costs.

HNWItaly is specialised in facilitating the transfer of residence and the handling of various bureaucratic formalities. In particular we can we help you in:

• Assessing the preliminary feasibility with the client wishing to transfer to Italy.
• Evaluating benefits deriving from the special regime.
• Advising on an efficient structuring of worldwide assets.
• Analysing and proper managing of possible double taxation issues;
• Tax planning on your income and assets
• ​VISA application;
• Tax return filing and Italian tax compliance,
• Tax payment support
• Other aspects related to the relocation (legal assistance, real estate, immigration, accommodation, bank account, etc).
• Assistance in organising visits to Italy and staff who can provide detailed information about the country.