Friday, April 28, 2017

Italy is the New Tax Paradise

Have you ever imagined relocating to Italy, but worried about the fiscal consequences of paying taxes in a foreign country? Wealthy individuals residing overseas are now encouraged by the Italian Revenue Agency to apply for a tax scheme that would collect an annual flat tax of only €100,000 on income made abroad. The time is right for purchasing real estate in Tuscany or elsewhere on the spectacular Italian peninsula.
The flat tax proposed by the Italian government is for individuals (not corporations) wishing to move their fiscal residence to Italy. To be eligible, you must have lived outside of the country for nine of the last 10 years. You must also have a minimum net worth of € 15 million. Drawing in affluent foreigners as new residents benefits the Italian Revenue Agency, to be sure, but it is also advantageous for the incoming rentiers fortunate enough to qualify for a move to Italy.

The new Italian tax regime is expected to lure applicants across the world, especially those currently benefiting from the UK’s non-domiciled tax status, which is expiring soon as a result of last year’s ‘Brexit' vote. High-income business people from Russia and the Arab world who vacation in Tuscany can now seriously consider investing in real estate in Florence for its fiscal advantages.

Italy has long welcomed visitors from all income levels because of its fascinating past, the unparalleled beauty of its coastlines and inland villages, and its important place in the food and fashion industries. The flat tax measure is just one more perk for those with a high net worth to seriously think about Italy as a home base, more than just a heavenly vacation destination.

The scheme works as follows: each year, the taxpayer pays € 100,000 that covers foreign income, excluding capital gains acquired from selling financial holdings during the first five years of the measure’s validity. Income generated in Italy would be taxed at the usual rate. The proposal should be especially convenient for the more than 100,000 super wealthy individuals who have used London as a similar tax haven for more than 15 years, but who will lose their “non-domiciled” status there beginning in April.

A move to Florence could represent the start of a brand new life in Italy, for you and your family. Indeed, family members who want to register their own fiscal status in Italy may be included in the tax scheme at an additional flat fee of € 25,000 per person. Once approved, the option is automatically renewed annually for a period of 15 years.

Application forms (in Italian) can be found Taxpayers are required to provide relevant data including an Italian social security number and an Italian residence address. A checklist compiles the necessary items. Requests can be made in person, through certified mail or via email. It is necessary to file the request within the deadline for tax returns.

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