Who can benefit from this regime?
This tax regime is specifically conceived for people who have never been Italian fiscal residents or who have not been such for many years prior to the application, who intend to transfer their residency in Italy and pay taxes in Italy on their foreign-sourced income.
Note that, in order to reside in Italy, the foreign national who does not already hold an Italian residence permit will have to apply for a visa that suits their personal and professional profile. For instance, in case of a passive income deriving from investments, a pension or capital shares, the foreign national will be entitled to a visa and residence permit for Elective residence.
What are the fiscal effects of the € 100 K Lump-Sum Tax regime?
• eligible taxpayers who opt for the Res Non-Dom Program are subjected to a yearly lump-sum tax on foreign-sourced income of EUR 100,000 (with the possibility to extend the Res Non-Dom Program to each family member with an additional yearly lump-sum tax of EUR 25,000 each);
• notably, for the first 5 years of application of the €100 K Lump-Sum Tax regime, the capital gain derived from the transfer of qualifying shareholdings (>20%) is excluded from the Res Non-Dom Program and, therefore, ordinary taxation applies;
• foreign assets are not subjected to Italian reporting obligations and are exempted from Italian wealth taxes;
• likewise, donations and inheritance concerning foreign assets are exempted from Italian taxation.
Main requirements to apply for the € 100 K Lump-Sum Tax regime
• the applicant must have been a non-Italian fiscal resident at least 9 years out of the 10 years prior to the first year of application of the €100 K Lump-Sum Tax regime;
• the applicant must have transferred the residency to Italy by the 2nd of July of the year following the first fiscal year for which they request the application of the special regime;
• the applicant must opt for this choice within the ordinary deadline for tax returns (eg. the application should be submitted by 30 November 2023 for the fiscal year 2022);
Even if not mandatory, it is recommended that the taxpayer obtains approval by the Italian tax authorities following a preliminary examination procedure to confirm that the individual qualifies for the Res Non-Dom Program. Tax Authorities have 120 days to rule on the applicant’s request. The lack of any response equates to an expression of approval.
Duration of the 100 K Lump-Sum Tax regime
The Res Non-Dom Program can be effective up to a maximum period of 15 years. The option for this regime can be revoked by the taxpayer before its natural expiration. However, if revoked, the regime can no longer be reactivated.
Get in Touch
Do not hesitate to write to us if you wish to have additional information on this special tax regime and counselling on your specific fiscal situation and on the type of visa you could apply for to become an Italian resident.