News

Information Report. Flat Tax for non-residents

Mar 31 2017

Author: Simone Maria d'Arcangelo

Article 1, paragraph 152, of Law December 11, 2016, no. 232 (the so-called "2017 Budget Law"), has entered into the Consolidated Income Tax Law article 24-bis that, as an alternative to the ordinary regulation, provides for a special tax regime for individuals who transfer their tax residence in Italy provided that they have not been resident in at least nine of the ten fiscal years that precede the start of the validity of the option.

Simone Maria d'Arcangelo

The optional regime, accessible also to residents of the so-called "black list" countries, allows to pay a tax in lieu of the income tax on individuals for incomes produced abroad (except for capital gains on transfers of qualified participations to foreign subjects, made within five years from the transfer in Italy) of Euro 100,000.

For the income produced in Italy, however, ordinary income tax rates and rules apply.

Taxpayers who meet the requirements can join the new regime at the time of submission of the tax return, related to the tax period in which the fiscal residence was transferred in Italy or in the period immediately after. Furthermore, it is also possible to submit a specific preventive petition to the Central Assessment Directorate of the Revenue Agency. The petition can be delivered by hand, by registered mail with return receipt or by certified mail.

For non-residents without domiciliary in the State, the petition may be transmitted to the ordinary email address This email address is being protected from spambots. You need JavaScript enabled to view it..

The petition must be signed with a handwritten signature, or, in cases where the document is sent via certified mail, with digital signature.
In the petition, the taxpayer must indicate:

  • its personal data and, if already allocated, its fiscal code, in addition to its home address in Italy, if already resident;
  • the status of non-resident in Italy for at least nine tax years during the ten preceding the start of the validity of the option;
  • the jurisdiction or jurisdictions of its last tax residence before exercising the option; the states or overseas territories for which it intends to exercise the option of not using the substitute tax. The taxpayer must also indicate the existence of the elements necessary to have access to the regime, by filling out the checklist and submitting the relative supporting documentation;

The option must be exercised within the period available for the submission of tax returns, even if a reply by the Revenue Agency has not yet been received.

The application may be submitted even if the period for establishing the fiscal residence in Italy has not yet expired.
The option is tacitly renewed from year to year, while its effects cease, in any case, fifteen years after the first period of tax validity.
The provision of 8 March 2017 of the Director of the Revenue Agency has approved the checklist form to attach to the petition (enclosed) that allows for a preventive assessment of the financial administration on the eligibility to the regime in question.
The "flat tax" can be extended to one or more family members who meet the requirements, through the specific indication in the tax return of the tax period in which the family member transferred his/her current or subsequent fiscal residence in Italy. In this case, the substitute tax will be equal to 25,000 Euros for each family member.
The substitute tax payment must be made in a single solution, for each tax period of effectiveness of the regime, by the date due for the payment of the balance of income tax.

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Relevant law and practice:

  • Law 11 December 2016, no. 232, from paragraph 152 to 159;
  • Decree of the President of the Republic 22 December 1986, no. 917 (Consolidated Text of the Laws on Income Tax), Article 24 bis;
  • The provision of 8 March 2017 of the Director of the Revenue Agency with which the checklist form to attach to the petition was approved;
  • Press release of the Revenue Agency of 8 March 2017.

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