Relocating to Italy is a dream for many, offering a rich blend of history, culture, and stunning landscapes. Whether you're drawn to the artistic streets of Florence, the bustling energy of Milan or the coastal beauty of the Amalfi Coast, Italy provides an unparalleled quality of life.
In this guide, we’ll walk you through everything you need to know about relocating to Italy from a personal tax perspective, including tax residency, income tax, special tax regimes and tax return obligations.
TaxPilot recommend that you organize your affairs in good time to get ahead and make the most of favorable tax treatment while making sure you’re meeting your tax return obligations.
Italy follows a residence taxation model. If you are resident, you will pay tax worldwide incomes. If you are non-resident, you will pay tax on local incomes only.
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Providing that you were non-resident for two years prior to arrival, you will live in Italy for two years and you will be present in Italy on at least 183 days per calendar year, you can exempt 50% of your employment income or self-employment income for a period of five tax years. Italy can be a very tax efficient place to live in and as such, Global Tax Consulting recommends seeking personalized tax planning advice to take advantage of the special tax regime.
Exempt 50% from Italian taxation.
100,000 EUR per tax year.
Applied for 5 years.
Tax on property and share sales
Tax on value of owned assets
Tax on assets passed to heirs
Tax to contribute to state welfare
If you receive incomes overseas while you are living in Italy, you may find the source country, as a starting point, continues to tax the income which may cause double taxation unless you are using special tax regime.
Double taxation agreements can be used to mitigate double taxation and receive tax free income. As such, the more double taxation agreements a country has, the better, as agreements will ensure you’re not taxed twice and even better, ensure your income is tax free.
At present, Italy has 99 double taxation agreements signed.
