Italy: Flat Tax for New Residents, the 7% Rule and the Investor Visa

Getting residence: EU citizens and everyone else

EU citizens staying longer than three months register in the municipal population register, the Anagrafe. The core requirements are an ID, an address and proof of how you live: an employment contract, self-employment, or for those who do not work, sufficient means and health insurance. You also need a tax code, the codice fiscale, without which no lease or bank account works. After five years of lawful residence you obtain permanent residence. A non-EU spouse or partner of an EU citizen can usually join through EU family rules rather than any investment.

Non-EU nationals need a national visa and then a residence permit. The two routes relevant for wealthy movers are:

• The investor visa, described below, which requires an investment in Italian companies, bonds or a philanthropic project.
• The elective residence visa, for people living on passive income such as pensions or investment returns, with no right to work in Italy. The consulates set the income requirement and check it case by case, so treat any figure you see online as a guide value.

Tax residence since 2024

Italy rewrote its tax residence test with Legislative Decree 209/2023, effective from tax year 2024. You are resident if, for most of the year, meaning more than 183 days, you meet any one of these:

• residence in the civil-law sense, your habitual abode,
• domicile, now defined for tax purposes as the place of your main personal and family relationships,
• physical presence in Italy, where part days count,
• registration in the Anagrafe, which is now only a rebuttable presumption.

Domicile is the one to watch. Bring your family to Italy and you become resident quickly, even if you travel a lot yourself. For movers from Germany, the Germany-Italy tax treaty allows the year of the move to be split, which the Agenzia delle Entrate mentioned explicitly in its circular 20/E of November 2024.

The art. 24-bis flat tax: how it works

The new-resident regime sits in art. 24-bis of TUIR, the Italian income tax code. The mechanism is simple: instead of ordinary income tax on foreign income, you pay a fixed annual amount. Italian-source income is taxed normally.

The conditions:

• Nine out of ten years non-resident. You must not have been tax resident in Italy in at least nine of the ten tax years before the move.
• A genuine move. You must actually shift your tax residence to Italy under the tests above.
• Election in the tax return. You elect the regime in the return for the year of the move or the following year. An advance ruling from the Agenzia delle Entrate, the interpello, is optional but gives certainty before you move.
• Payment in one sum. The amount is due by 30 June, with no instalments. Miss it or pay short and you lose the regime with no way back in.
• Fifteen years at most. The regime then ends automatically. You can revoke it at any time.

The amount depends on when you moved, and the amount that applies to you stays fixed for the duration:

• moved by 10 August 2024: 100,000 euros a year,
• moved by 31 December 2025: 200,000 euros, introduced by Decree-Law 113/2024,
• moved since 1 January 2026: 300,000 euros, introduced by the 2026 Budget Law (Law 199/2025).

Family members can be added: spouse, children, parents and siblings, if they also move to Italy and meet the same nine-of-ten test. For moves since 2026 this costs 50,000 euros per person per year, previously 25,000 euros.

What the regime adds:

• No wealth taxes on foreign assets. The levies on foreign real estate (IVIE) and foreign financial assets (IVAFE) do not apply.
• No RW reporting of foreign assets in the tax return.
• Inheritance and gift tax in Italy applies only to assets located in Italy, not to assets abroad.
• Country carve-outs. You can exclude individual countries from the regime. Income from there is then taxed normally with a credit for foreign tax.

What the flat tax does not cover

The 300,000 euros buy you treatment of foreign income, not of everything:

• Italian-source income is taxed at ordinary rates. The top income tax rate is 43 percent above 50,000 euros, plus regional and municipal surcharges. Italian investment income is generally taxed at 26 percent.
• Gains on substantial shareholdings are excluded for the first five years. If you sell your company shortly after arriving, Italy taxes that gain normally.
• Work performed in Italy is Italian-source income. Working from Milan for a foreign employer generally produces Italian income, not foreign income.
• Citizenship-based taxation stays. A US citizen remains taxable in the United States on worldwide income whatever Italy charges. For Americans the flat tax removes the Italian layer, not the US one, and whether the flat amount can be credited against US tax is a question for a US adviser.
• Social security, living costs and advisers come on top: the interpello, the returns and the ongoing line-drawing between Italian and foreign income.

Who it still pays off for

A rough calculation shows how narrow the circle has become. Without the regime, foreign investment income in Italy would mostly be taxed at 26 percent. 300,000 euros equals 26 percent of about 1.15 million euros. Only someone with consistently more foreign investment income than that comes out ahead on income tax alone. For a family member at 50,000 euros the break-even is just under 200,000 euros of their own foreign income. Add the saved IVAFE, normally 0.2 percent of foreign portfolios, and the inheritance tax treatment. For very large estates the inheritance side can matter more than income tax.

At 300,000 euros the regime is for families with very large, internationally invested wealth. There is political risk too: the amount was raised twice in 17 months. Those already in keep their amount, but nobody guarantees the future.

The 7% regime for pensioners in the south

For retirees there is a second, much cheaper regime under art. 24-ter TUIR. If you receive a pension paid from abroad and move to a small town in the south, you pay 7 percent on all foreign income: according to the Agenzia delle Entrate not just the pension but also foreign dividends, interest and capital gains.

The conditions:

• a foreign pension as the entry ticket,
• five years without Italian tax residence before the move,
• moving from a country with an administrative cooperation agreement on tax matters with Italy, which covers the EU and many others but should be checked for your country,
• a municipality in the Mezzogiorno: Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise or Apulia. Since 7 April 2026 the population limit there is 30,000 instead of 20,000 (Law 34/2026). A separate rule covers certain small towns in the earthquake areas of central Italy.
• duration: the year of the move and the nine following, ten years in total.

The catch sits in the treaty. Whether Italy may tax a given pension at all depends on the tax treaty with the paying country. Government service pensions often stay taxable in the paying state, and then the 7 percent does nothing for them. Check which country has the taxing right before you plan around the rate.

Impatriati: for people who work in Italy

If you will actually work in Italy, the impatriate regime under art. 5 of Legislative Decree 209/2023 is the relevant one. It applies to moves since 2024:

• 50 percent of employment or self-employment income is exempt, up to 600,000 euros of income a year,
• 60 percent with a minor child, or a birth or adoption during the period,
• five years: the year of the move and the four following,
• three years of non-residence before the move, longer if you return to the same employer or group,
• high qualification or specialisation, and a commitment to stay resident in Italy for at least four years.

Until now the impatriate regime and the flat tax could be combined: Italian work half exempt, foreign income at a flat amount. Decree-Law 38/2026, converted into law in May 2026, bans that combination for anyone moving from tax year 2027. Those who shift their residence to Italy in 2026 can still combine them.

The investor visa

The Italian investor visa is aimed at non-EU nationals. You pick one route:

• 250,000 euros in an innovative Italian start-up,
• 500,000 euros in an Italian limited company,
• 1 million euros as a donation to a project in culture, education, research or heritage,
• 2 million euros in Italian government bonds.

Real estate does not qualify, and amounts cannot be combined across routes. The process runs in three steps: first a certificate of no impediment from the ministry (the nulla osta, which practitioners reported taking about a month in 2026), then the visa at the consulate, then the investment and the residence permit. The permit depends on keeping the investment in place.

For an EU citizen the visa only matters if a partner or parent has no EU passport and cannot come through EU family rules.

The home-country side

Italy is not a low-tax country, but leaving still has a cost at home:

• Germans stay fully taxable while they keep a home in Germany they can use at any time; then the treaty tie-breaker decides (permanent home, centre of vital interests, habitual abode), and 183 days are only one indicator. Germany's extended limited tax liability can also apply to moves into a preferential regime for newcomers, and its exit tax on shareholdings of 1 percent or more is now payable in seven instalments even within the EU.
• UK nationals need a visa since Brexit and should check UK statutory residence rules for the year of departure.
• US citizens keep filing in the US, as described above.
• Gulf and Asian nationals coming from no-tax or territorial systems usually face no exit cost but move into a system that taxes worldwide income unless one of the regimes applies.

The wider picture is in the overview of Plan B residency options and in the Cyprus non-dom guide, and what is left of the other EU programmes is in the EU golden visa overview. The outcome always depends on the individual case, and advisers in both countries are needed.