Abstract
The new Finance Law 2017 aims at putting Italy in a competitive position in order to attract people and organizations, and proposes an evident and remarkable reduction of tax on foreign income and on income of professor and researcher that decide to come back to live in Italy.
The Finance Law for 2017 provides the following measures:
- A 3-year tax exemption on 90% of the remuneration for professors and researchers;
- A 5-year tax exemption on 50% of the remuneration for managers and professionals;
- A 100.000 Euro considered as substitute tax on all foreign source income of individuals who became Italian Resident after at least a 9-year in the last 10 years of residence outside of Italy.
Those three measures are not cumulative.
But first take into account that in order to be considered Italian resident:
- Must be registered in the Public Register of the people resident in Italy,
- Must have the Italian domicile for the most of the year.
The last measure is one of the most challenging, the tax of 100.000 Euro is due every year for a maximum period of 15 years and just for the following type of income is valid this special taxation :
- Income coming from goods located abroad,
- Income coming from an activity done abroad,
- Given by a foreign subject.
The following case cannot benefit from this option:
- the sale of qualified participation (i.e. for Stock Company Participation > 20% for Partnership Company Participation > 25%),
- or capital gain obtained in the first 5 years of validity of this special regime and so they will be subjected to the progressive rate.
The option is valid after having obtained a favorable response to specific ruling submitted to the Inland Revenue Agency.
This tax regime will be valid for the next 15 years, except if
revoked.
Moreover if requested by the taxpayer the option can be extended to
other parents, who have to respect the same requisites, but the
annual tax is reduces to 25.000 Euro for each parents.
Forehead the tax payer must indicate in the initial request the countries where apply this special regime, these countries must be those that allows the information exchange, and the parents related who want use this option.
Finally, note that:
- The applicant and the family members included in the application are exempt:
- By fiscal monitoring obligations (RW compilation framework);
- From payment of tax on foreign real estate (IVIE);
- From paying tax on the value of foreign assets (IVAFE);
- With respect to succession, or donations during the period of validity of the option, the Inheritance tax and gift tax is due only for the goods and rights held in Italy (and not "in relation to all the assets and rights transferred , although existing abroad "), when the assignor is a taxpayer subject to the option art. 24 bis TUIR (the Income Tax Law). The standard does not specify the countries for which applies that provision, but in the silence of the standard and in line with its ratio, the inheritance and gift tax exemption would operate only with reference to the countries for which the assignor it has requested the application of the lump-sum taxation (art. 24 bis).
Moreover Italy will provide a fast-track visa procedure for investors and their relatives.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
