Italy’s government approved a measure on Wednesday that doubles the “flat tax” applied to income earned abroad by wealthy individuals who transfer their tax residence to the country, raising it to 200,000 euros ($218,220) per year. This favorable tax regime for affluent new residents was initially introduced by a center-left government in 2017 to attract high spenders and invigorate Italy’s sluggish economy.
Economy Minister Giancarlo Giorgetti stated that the scheme had already prompted 1,186 relocations to Italy. This policy has come under increased scrutiny following Britain’s decision to end its long-standing regime for non-domiciled (‘non dom’) residents. The previous conservative government in Britain decided to abolish the ‘non dom’ regime after April 2025.
Giorgetti emphasized that Italy opposes the idea of countries competing to offer “fiscal favors” to the wealthy. “Like we said at G20 and G7 meetings, we’re against engaging in a competition with other countries to create tax havens for people or companies. A country such as Italy, with limited fiscal room, can only lose such a competition,” he remarked to reporters.
Tax advisers predict that Italy is likely to become the new destination for many wealthy ‘non dom’ British residents seeking to protect their offshore income from higher taxation. “We are working with a number of clients who are considering relocating from the UK to Italy for tax reasons,” said Vito Di Pede, a tax adviser at Milan’s Studio Rock tax and law firm.
Italy’s decision could provide a modest boost to Rome’s public finances as Prime Minister Giorgia Meloni prepares a 2025 budget aimed at reducing the country’s significant fiscal gap. This move is seen as a strategic attempt to attract wealthy individuals and their financial resources to Italy, potentially aiding in economic revitalization efforts.