Italy’s government has approved increasing the flat tax from 100,00 EUR to 200,000 EUR applied to income earned by wealthy individuals who transfer their tax residency from abroad to Italy under its optional, non-domiciled (‘non-dom’) tax regime introduced in 2017.
This non-dom tax regime aims to help Italian sluggish economy by attracting wealthy foreigners to become residents and thus the taxpayers in Italy by paying the fixed amount of tax (‘flat tax’) of 100,000 EUR per annum for an individual’s entire global, overseas income. Moreover, the regime provides a range of other tax advantages related also to foreign property and other foreign assets of such non-dom tax residents. Another considerable advantage is that non-doms are exempt from disclosing their assets held outside of Italy as the ordinary reporting provisions of Italian tax law do not apply to them.
The scheme has led to about 1,186 relocations and raised approximately 254 million euros in taxes for Italian state budget. However, new Italian government is against the idea of countries competing with each other to offer “fiscal favours” to the wealthy according to Italian Economy Minister Giancarlo Giorgetti. Also the EU criticises the regime as unjust and harmful because it offers large exemption to extremely rich individuals, pursuant to EU Tax Observatory.
Our view: We dare to disagree with the above positions that such regimes as harmful. Is raising more than 250 millions euros in taxes harmful? Putting aside the fact that such regime is open not just to “wealthy”, but to anyone willing to pay the flat tax of 100,000 EUR every year, the EU should turn its attention to the real issue here and it is exorbitantly high taxes in most EU member states. No wonder that the EU economy is losing its competitiveness and investments are flowing not in, but out to more tax favourable jurisdictions such as UAE/Dubai and other countries in Middle East and Asia.
Do you want to know more about Italian non-domicile tax regime and/or similar tax regimes in other countries? Interested how to become tax resident in such tax favourable country, pay less tax and enjoy your life with more money for yourself? Drop us an email (office@bensonformations.com) or give us a call (+44 20 3974 1244) at any time.
