Normative references

Art. 1 (152 – 159) of Law No. 232 of December 11, 2016 (the Budget Law for 2017).

Art. 24-bis of Presidential Decree No. 917 of December 22, 1986 (Italian Tax Consolidated Act).

Provision from the Director of the Italian Tax Authority, Protocol No. 47060 of March 8, 2017.

Relevant features of the tax regime

Qualifying persons: Individuals who have been non-tax resident in Italy for at least nine out of the 10 years preceding their transfer to Italy.

Benefits: Qualifying persons transferring their tax residence in Italy are entitled to apply a substitute flat tax to their foreign income and gains amounting to €100,000 for each fiscal year.


On March 8, 2017, the Italian Tax Authorities issued Protocol No. 47060 providing for the implementation measures with respect to the special Italian non-dom tax regime introduced by the Budget Law for 2017, aimed at enhancing investments and attracting high-net-worth individuals to Italy.

In particular, Italy's Budget Law for 2017 introduced, within the Italian Tax Consolidated Act, the new article 24-bis under which qualifying individuals transferring their tax residence to Italy may opt for the application of a substitutive tax on their foreign income.

With the Circular Letter 17/E, released on May 23, 2017, the Italian tax authority provides several clarifications and additional guidance for the application of the regime under discussion.

Elegibility for the special tax regime

Taxpayers entitled to opt for the special regime under examination are those individuals:

  • Transferring their residence to Italy for tax purposes:  as a general rule, individuals are demeed to be resident in Italy if they meet any of the following conditions on 183 days or more during the tax year. (i) The individual is registered in the Civil Registry of the Resident Population; (ii) The individual has his/her domicile in Italy pursuant to the Italian Civil Code which is "the place where an individual has established his principal center of business and interest" and (iii) The individual has his residence in Italy pursuant to the Italian Civil Code which is "the place where the individual's habitual abode is located";
  • Who were not resident in Italy for at least nine of the previous 10 fiscal years preceding the election, regardless of the citizenship of the same taxpayers (i.e. the option is available to both non-Italian and Italian nationals). 

How to make the election

The election can be made either in the annual income tax return related to the fiscal year of the transfer (i.e. the fiscal year in which the taxpayer becomes resident in Italy for tax purposes) or in the annual income tax related to the fiscal year following the year of the transfer.

In each case, the benefits deriving from the special tax regime apply from the fiscal year in which the taxpayer exercises the option in the annual income tax return.

In order to elect the special regime, the taxpayer may file a ruling request with the Italian tax authority intended to verify the existence of the requirements for the special regime; in this respect, the Protocol No. 47060 has clarified that the filing of the ruling is not mandatory.

Together with the ruling request, the taxpayer must submit a specific "Check List" – a form issued by the Italian Tax Authority containing the relevant information needed to identify any element of connection with Italy in order to assess the requirement of the non-resident status – and, where relevant, supporting documentation.

Whereas the taxpayer decides not to submit the ruling request, both the Check List and the relevant documentation must be attached to the annual income tax return in which the election is made.

However, in respect of the submission of the tax ruling, it must be highlighted that under the optinion of the scholar, despite as it was clarified by the Protocol  No. 47060, the submission of the tax ruling is a mandatory fulfillment because it represents the only stage at which the Tax Authority could assess the information and the position of the taxpayer in order to evaluate the integration of the requirements to opt for the HNWI substitute tax regime.

In making the election for the special regime, the taxpayer may elect, in the ruling request or in the annual income tax return, not to apply the exemption with regard to income from certain countries (so-called "Cherry picking" principle); in such case, the income is subject to the ordinary rules, including the use of tax credits for the foreign taxes1.


The special regime allows eligible new resident taxpayers to opt for the payment of an annual flat substitute tax of €100,000 Euro (which is due by June 30 of each year in one-off payment) in lieu of:

  1. Income tax (IRPEF) on any non-Italian source income, with the sole exception of the capital gains realized upon the disposal of qualified shareholdings2 during the first five years from the time of the transfer (i.e. from the time in which the election is made);
  2. 0.2% tax on financial assets held abroad by Italian tax resident individuals (the so-called IVAFE);
  3. 0.76% tax on immovable property held abroad by Italian tax resident individuals (the so-called IVIE);
  4. Gift and inheritance taxes3.

Furthermore, the application of the substitute tax exempts the taxpayer from all the reporting obligations related to the holding of assets abroad (i.e. the "RW" reporting obligations).  

Coverage for family member

The special tax regime can be extended to family member by paying an additional € 25,000 substitutive tax, provided that the same requirements applicable to the electing taxpayer are met (i.e. the transfer of the residence in Italy and the family member has been non-tax resident in Italy for at least nine out of the 10 years preceding their transfer to Italy). 


The election is valid and automatically renewed every year for a maximum of 15 fiscal years.

The election can be revoked at any time and will cease to apply in the event of failure to pay the substitute tax and after 15 years from the first fiscal years of validity.

After the termination or the revocation, it is not possible to apply again for the special tax regime. 

Click  here for the normative references.


1 Further countries can be added to the list of the excluded countries in the annual tax income return of the subsequent fiscal years

2 Qualifying shareholdings are those representing more than 20 percent of the voting rights or more than 25 percent of the capital of the relevant company, with the thresholds reduced to 2 percent and 5 percent for listed companies.

3 The taxpayer who exercised the option for the special regime under discussion, will be exempt from gift and inheritance tax on transfers of assets located abroad (i.e. outside Italy).

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