Italy: Favorable tax regime for non-domiciled residents | KPMG | GLOBAL

Italy: Favorable tax regime for non-domiciled residents, to encourage investments

Italy: Favorable tax regime for non-domiciled residents

The 2017 budget law introduces new arrangements that are intended to attract capital investments to Italy.

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The budget law measures provide for:

  • A favorable tax regime on income produced abroad by new non-domiciled residents—this includes a “flat rate” tax of €100,000 (€25,000 for the taxpayer’s relatives) on certain foreign income including income from rental activities, from capital, from employment, and corporate income (with or without a permanent establishment)
  • An exemption from certain reporting requirements with respect to the wealth tax
  • “Ordinary taxation” with respect to capital gains from “qualifying holdings” realized in the first five fiscal years and also on Italian sourced income
  • Inheritance and gift tax on Italian assets only (not on assets held abroad)
  • Simplified processes for visa and residency permits for foreign investors

The new regime, once elected, is available from fiscal year 2017 and will apply for 15 years. The election for the special tax regime can be revoked at any time, and the special regime tax treatment will terminate immediately if any tax is not paid, or is only partially paid, by the due date for remittance of the tax.

Procedures to implement the new regime are expected to be provided in a circular from the Italian tax authorities once the budget law is enacted.

 

Read a January 2017 report [PDF 176 KB] prepared by the KPMG member firm in Italy: Non-domiciled residents

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