Impatriate Tax Regime: A Guide for Expats in Italy

Italy offers an attractive tax incentive known as the Impatriate Tax Regime (Regime impatriati). It encourages skilled workers, entrepreneurs, and professionals to relocate to the country. The scheme provides significant tax reductions for eligible individuals who transfer their tax residence to Italy and work predominantly within its territory.

Key Benefits of the Impatriate Tax Regime

One of the main advantages of this regime is the tax exemption on employment and self-employment income. As of 2024, it allows eligible individuals to reduce their taxable income in the following way:

• 50% exemption on employment or self-employment income.
• 60% exemption for those relocating with a minor child or who become parents through birth or adoption during the benefit period.
• Annual income cap of €600,000. Standard tax rates apply to any income beyond this threshold.

Who Can Apply?

To qualify for the Impatriate Tax Regime, individuals must meet the following requirements:

• Tax Residency Transfer: The applicant must become an Italian tax resident and work predominantly in Italy for most of the tax year.
• Minimum Period Abroad: The individual must have been a tax resident outside of Italy for at least three tax periods before relocation.
• Commitment to Stay: Beneficiaries must maintain tax residency in Italy for at least four consecutive tax periods to retain benefits.
• Professional Qualifications: The regime applies to workers with high qualifications or specializations, as outlined in Italian legislative provisions.
• Eligible Income: The tax relief applies to employment and self-employment earned while working in Italy. Business income is excluded.

Special Conditions for Employees of the Same Employer

Expats who were employed abroad by the same company (or a company within the same corporate group) before relocating can still access the regime. However, specific conditions apply:

• If the worker was not previously employed in Italy for the same employer, they must have been abroad for at least six tax periods.
• If the worker was previously employed in Italy for the same employer before transferring abroad, they must have spent at least seven tax periods abroad before returning.

How to Apply

Eligible individuals can apply for the Impatriate Tax Regime by submitting a formal request to the Italian Revenue Agency. Employees typically apply through their employer, while self-employed individuals can submit the request directly. Due to the complexity of Italian tax laws, we recommend an expert consultation to ensure compliance and maximize benefits. Don’t hesitate to contact us!