Italy: flat tax to attract rich foreigners

The Italian inland revenue service, L'Agenzia delle Entrate, on Wednesday applied a new flat tax aimed at attracting wealthy foreigners to Italy in a bid to compete with similar incentives offered in Britain and Spain, which have successfully attracted a slew of rich footballers and entertainers.

The new flat rate tax of €100,000 a year will apply to all worldwide income for foreigners who declare Italy to be their residency for tax purposes.
The measure, proposed in Italy's 2017 budget, is expected to immediately draw in at least a thousand people, according to local media.

But those who would want to take advantage of the tax rate would have to have resided abroad for nine of the last 10 years, and have sufficient income to make the 100,000 euro price tag an attractive deal.

An additional 25,000 euros per person would also be added to the tax rate of those who set up Italian residency for close family members. A person is considered an Italian resident for tax purposes if they are in the country for more than 183 days, or six months. According to Italian tax authorities, the flat tax would be renewable every year for a maximum of 15 years.

It could be taken up by thousands of people, according to estimates, and seeks to offer competition to countries such as Britain (which is gearing up for Brexit) and Spain, which have used tax incentives to attract wealthy people.