Tax Residency Incentives in Italy

Tax Residency Incentives in Italy — Your Guide (2025)

Posted on November 11th, 2025

Italy offers several tax incentives designed to attract retirees, entrepreneurs, high-net-worth individuals and remote workers. These regimes can be extremely generous — but they are complex and often conditional. This guide explains the main options in 2025, who qualifies, and how we can help you plan a compliant move.

Why Italy Offers Tax Incentives

Italy wants to attract investment, fresh talent and long-term residents to boost local economies — especially outside major cities. Tax incentives are tools to encourage relocation, entrepreneurship and pensioner migration to Italy’s regions.

Quick takeaway: These programs can cut your tax bill significantly — but they require careful documentation, residency compliance and ongoing reporting.

Major Incentive Programmes (Overview)

1. Flat-Tax for New Residents (Art. 24-bis)

What it is: a substitute flat tax on foreign-source income. As of 2025, a common benchmark is €200,000/year for the principal applicant (with additional rules for family members).

Who it’s for: high-net-worth individuals moving their tax residence to Italy.
Duration: typically up to 15 years (elective regime; check local rules).
Note: the rate and requirements have changed in recent years and further increases have been proposed for future applicants — plan accordingly.

2. Impatriate / Rientro dei Cervelli Regime

What it is: a favourable tax regime for skilled workers, executives and freelancers who relocate to Italy for work. In many cases a portion (e.g., 50%) of employment or self-employment income is exempt from Italian tax for a limited period.

Who it’s for: qualifying employees or self-employed professionals who weren’t tax residents recently in Italy.
Typical benefit: partial exemption on income (often 50%, rising in specific family/region cases).
Term: often 5 years with possible extensions under certain conditions.

3. 7% Flat Tax for Foreign Pensioners in Small Southern Towns

What it is: a highly attractive 7% tax on foreign-source pension income for up to 10 years if you move to qualifying municipalities (usually under 20,000 residents) in specified southern regions.

Who it’s for: foreign pensioners who commit to living in qualifying small towns.
Why it matters: extremely low tax rate compared with many countries.

Key Requirements & How to Qualify

Although each scheme has its own rules, there are common requirements you must meet:

Tax residence in Italy: typically >183 days in Italy per year, or registration with the anagrafe (resident registry) and proof the centre of your life is in Italy.
Non-residence condition: many regimes require you were not tax resident in Italy for a certain number of previous years.
Stable income: documented passive income or eligible employment income, depending on the regime.
Accommodation: proof of housing in Italy (rental contract or deed) and genuine intention to reside.
Insurance & compliance: private health insurance where required; timely tax filings and residency maintenance.

Heads up: Consulates and local tax offices (agenzia delle entrate) sometimes apply discretion and local interpretation. That’s why preparing strong documentation matters.

What’s Changing — Policy Watch (2025)

Italian tax incentives have evolved quickly. Recent developments to watch:

The flat-tax for new residents has been raised in recent years (previously €100k → €200k), and proposals to raise it further have been discussed in draft budgets. Changes may affect future applicants.
Regional add-ons and special municipal incentives (to attract residents to small towns) can appear and disappear — timing is important.
Law and regulations are updated frequently; always verify rules for the year you plan to move.

How We Help — Our Services

At Expats in Italy / Expats Living in Rome we support clients through the full planning and relocation process:

Consultation to review your profile, income sources and relocation goals.
Strategy call (30–60 mins) to design the timeline, choose the right regime and list documents required.
Document collection & review: we help you gather proof of non-residence, income, accommodation and identify gaps.
Introductions to trusted commercialisti & notaries: implementation partners who handle tax filings, elections and notarial needs.
On-the-ground support: assistance with anagrafe registration, health insurance options, opening an Italian bank account and residency procedures.

Book a consultation today→

Is a Tax Incentive Right for You?

Ask yourself:

Is most of my income foreign-sourced (pension, rents, dividends, investments)?
Can I realistically spend most of the year in Italy and establish residency?
Have I been non-resident in Italy for the required look-back period?
Am I prepared to engage with Italian tax and legal advisors for compliance?

If you answered yes to several of the above, it’s worth exploring — but planning is essential.