The 2017 Italian “Legge di bilancio” provides different types of tax incentives for the attraction of new residents in Italy.

More specifically, here we want to deal with the acquisition of Italian tax residence by individuals who decide to transfer their tax residence in Italy with the possibility of paying a flat-rate substitute tax on personal income tax (IRPEF) on income produced abroad, as an alternative to ordinary taxation.

This regime has a duration of fifteen years and is usable by both foreigners and Italians provided they have been resident abroad for at least nine out of ten previous tax periods.

The facilitation can also be extended to the following family members and related:

- spouse or member of a civil union

- children, even adoptive ones, and, in their absence, the closest descendants

- parents and, in their absence, the next ascendants

- the adopted

- sons-in-law and daughters-in-law

- the father-in-law and the mother-in-law

- brothers and sisters.

The facilitated regime is applicable to family members and related provided that the time limits described above are respected.

Only income produced abroad is subject to the facilitated regime.

The following income is included in the facilitated regime:

- self-employment resulting from activities carried out abroad

- business activities carried out abroad through a permanent establishment

- employee income earned abroad

- income from properties owned abroad

- interest deriving from bank current accounts paid by foreign subjects

- capital gains realized on the disposal of investments not qualified in foreign companies.

Capital gains realized on the sale of qualified foreign holdings in the first five years of residence in Italy do not fall under the facilitated regime.

The subject who intends to join the facilitated regime is subject to a substitute tax of € 100,000 for each year. For family members, a substitute tax of € 25,000 is required for each year.

New residents are exempted from exposing foreign investments and financial income in the tax return.

They are also exempt from the payment of the tax on the value of buildings held abroad (IVIE).

They are also exempt from the payment of the tax on the value of financial products, current accounts and savings accounts (IVAFE).

The exemption from inheritance tax and donation for assets and rights existing abroad is also envisaged. Obviously the exemption is extended to the family members who change their residence.

The duration of the faclitated regime is 15 years without the possibility of renewal.