High Net Worth Individuals can become residents, later permanent residents in Italy through an exclusive tax status agreement. The applicants must pay a fixed annual tax for the right of living in the EU.
Advantages of the residency by tax agreement in Italy
- You can live in Italy and stay in the other countries of the Schengen area.
- The fixed lump-sum tax is 100,000 euros per year, instead of the progressive scale taxation.
- You don't have to live in Italy to maintain your permanent resident status.
- The tax agreement scheme allows you and the members of your family to become permanent residents and later citizens of Italy.
- The residents are exempt from the Italian financial monitoring system
- There is no inheritance and gifts tax in Italy for the residents under the tax agreement scheme
- You don't have to pay the taxes on real estate abroad (IVIE) and the on the property and financial assets abroad (IVAFE).
How does the tax agreement residency scheme work?
The resident must pay a fixed 100,000 euros annual tax on his or her foreign-sourced income and 25,000 euros for each additional family member.
Which foreign-sourced incomes qualify for the Italian tax residency program?
- Income from self-employed status and employment
- Dividends and interests
- Business income from foreign projects and operations
- Capital gains from assets and activities abroad
- Income from property and real estate holdings
How to apply for Italy residency under the tax agreement?
- First of all, you will need a tax decision for the favorable tax status before 30 September.
- You must clarify your last tax residence and name the members of your family who will join you in Italy.
- Take care, in the case of non-payment or overdue payment of the fixed tax; the Italian authorities will cancel your tax status.
- You can obtain the special tax status only once. If you lose it, can't apply for it again.
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.