The decree issued on August 7 by Giorgia Meloni’s far-right government provides for tougher taxation of income generated abroad for billionaires who have chosen to transfer their tax residence to Italy. The adjustment to this tax regime, introduced in 2017, comes at a time when the head of the Italian government is struggling to finance her 2025 budget.
On leaving the Council of Ministers, Economy Minister Giancarlo Giorgetti hailed the Italian government’s approval of“a regulation that has caused quite a stir: the doubling of the flat-rate tax for billionaires”.
This measure applies to very wealthy foreigners who wish to transfer their tax residence to Italy. Under the terms of the decree signed on August 7, this annual flat-rate income tax will rise from €100,000 to €200,000.
An initially generous tax regime
This flat-rate tax on income earned abroad has not always been a punitive instrument for wealthy individuals wishing to settle in Italy’s charming climate.
In fact, it was quite the opposite that presided over the creation of this “flat tax des Picsous” (flat tax dei paperoni, in VO) in 2017. The aim was toencourage foreign individuals to settle in Italy, and in particular to bring back expatriate professionals and employees, as well as retirees and the newly rich. The other objective was to redirect capital to Italy.
In each case, the aim was to compete with countries such as Spain and the UK (now affected by the Brexit), which have succeeded in attracting emirs, footballers and artists.
This generous special tax regime was designed to be valid for 15 years, and could be extended to other family members in return for an additional “token” of 25,000 euros to the tax authorities.
It should be noted that the tougher measures proposed by Giorgia Meloni’s government are not retroactive, meaning that only newcomers will be subject to the doubling of this tax.
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