Anyone who transfers their tax residence to Italy and holds income produced abroad may benefit from a preferential tax regime designed to attract substantial wealth: here is how the flat tax for neo-residents works, explained in plain language.
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What Is the Neo-Resident Regime
The neo-resident regime, also known as the flat tax for new residents, is a tax relief that allows those transferring their residence to Italy to subject foreign-source income to a fixed-amount substitute tax, rather than to ordinary IRPEF taxation calculated as a percentage of income. It was designed in particular for individuals with substantial foreign assets and income, for whom the fixed amount is more advantageous than ordinary progressive taxation, and it has made Italy an internationally competitive destination for those considering a change of tax residence. For a broader view of available options, see our page on Tax Planning.
Who Can Access the Neo-Resident Regime
Anyone who transfers their tax residence to Italy and has not been tax resident in Italy for at least nine of the ten tax years preceding the transfer can access the regime. No minimum wealth or income threshold is required to opt in, but the neo-resident regime is especially advantageous for those with significant foreign income, since the substitute tax is due as a fixed amount regardless of the amount of foreign income received.
How Much It Costs: The Substitute Tax
For those transferring their residence to Italy from 2026 onward, the substitute tax on foreign income is set at €300,000 per year, an amount that has been revised upward several times by the legislator over the years. Those who transferred in earlier years retain the amount in force at the time they opted into the regime for its entire duration, without retroactive increases. It is also possible to extend the regime to family members (such as a spouse, children or other relatives indicated by the law), by paying an additional substitute tax of €50,000 per year for each of them, an amount raised from 1 January 2026 from the previous €25,000.
How Long the Regime Lasts and What It Covers
Duration of the Regime
The regime can be maintained for a maximum of fifteen years from the transfer of residence, and it is not renewable beyond this period.
Foreign Income Covered
The substitute tax covers income produced abroad, whatever its nature, replacing ordinary IRPEF and the related surcharges on such income.
Italian-Source Income
Income produced in Italy remains subject to ordinary taxation, under the normal IRPEF rules.
Optional Exclusion for Specific Countries
It is possible to choose to exclude income produced in one or more specific foreign countries from the regime; in that case, such income reverts to ordinary Italian taxation, with a credit recognised for taxes paid abroad.
Trusts and Estate Planning: What to Know Before You Relocate
Italy applies forced heirship rules (the so-called quota di legittima, articles 536 and following of the Italian Civil Code): a spouse, children and, in their absence, parents are entitled by law to a minimum share of an estate, regardless of what a will provides. This is a significant difference from common-law jurisdictions, where testamentary freedom is generally much wider.
Foreign trusts are generally recognised in Italy under the Hague Convention on the Law Applicable to Trusts, ratified by Italy with Law no. 364/1989. However, irrevocability alone does not automatically shield trust assets from forced heirship claims if Italian succession law ends up applying to the estate. For income tax purposes, the Italian Revenue Agency (Agenzia delle Entrate) distinguishes, in its Circular no. 34/E of 20 October 2022, between “transparent” trusts — where income is taxed directly on an identified beneficiary — and “opaque” trusts, where income is taxed at the level of the trust itself.
If you already hold a trust, or are planning your estate before relocating, the structure should be reviewed before the move, not after — both for its Italian tax treatment and for its resilience against forced heirship. Italian law also offers its own succession-planning tools, such as the patto di famiglia (family business succession agreement, articles 768-bis and following of the Civil Code), which can complement or, in some cases, replace a trust structure for Italian assets.
How Italy’s Regime Compares to Other European Options
Italy is not the only European country competing for internationally mobile wealth. Here is a general orientation — foreign rules change frequently, so always verify current requirements with an advisor licensed in that specific country before relying on them.
| Country | Regime | What makes it different |
|---|---|---|
| Italy | Flat tax for new residents (art. 24-bis TUIR) | A single fixed annual amount (up to €300,000 from 2026) covers all foreign-source income, whatever the actual amount earned abroad |
| Portugal | Former NHR regime | Closed to new applicants since 2024 and replaced by narrower, sector-specific incentives |
| Greece | Non-dom regime | A flat annual amount, generally conditional on a minimum investment made in Greece |
| Switzerland | Lump-sum taxation (“forfait fiscal”) | Tax base linked to living expenses, and rules vary significantly by canton |
| United Kingdom | Former non-dom regime | Abolished from April 2025 and replaced with a new residence-based system |
In practical terms, Italy’s flat tax stands out for its simplicity: one fixed sum, no need to disclose the actual amount of foreign income to determine the tax due, and — unlike several alternatives above — still genuinely open to new applicants.
FAQ – Frequently Asked Questions
Is a minimum level of wealth required to access the regime?
No, no minimum wealth or income threshold is required: the substitute tax is due as a fixed amount regardless of the amount of foreign income.
Do those who relocated years ago pay more because of the recent increases?
No: those who opted into the regime in previous years retain the amount in force at the time of their election for the entire duration of the regime, without retroactive increases.
Can a spouse or children be included in the regime?
Yes, the neo-resident regime can be extended to family members, upon payment of an additional substitute tax for each of them.
Must all foreign income fall within the regime?
No: it is possible to optionally exclude income produced in one or more specific foreign countries, which then reverts to ordinary taxation with a credit for foreign taxes paid.
What happens to my trust or estate plan when I move to Italy?
It should be reviewed before you relocate, both for its Italian tax treatment and for how it interacts with Italy’s forced heirship rules — see the dedicated section above.
Let’s Assess Together Whether the Flat Tax Is Right for You
If you are considering transferring your tax residence to Italy and want to understand whether the neo-resident regime is right for you, for a more technical analysis dedicated to high-net-worth individuals you can consult our page on the neo-resident regime and transfer of tax residence to Italy for substantial wealth, or contact us directly for an initial, no-obligation discussion. You may also find our page on Internationalisation useful if your relocation involves cross-border business interests.
Flat Tax for Neo-Residents: In Summary
The flat tax for neo-residents provides for a fixed-amount substitute tax on income produced abroad, for those who transfer their tax residence to Italy without having been resident there for at least 9 of the previous 10 years. Our firm assists with verifying eligibility requirements and managing the election for the neo-resident regime.
Frequently asked questions about the neo-resident regime
Who can access the neo-resident regime in Italy?
Anyone who transfers their tax residence to Italy and has not been tax resident in Italy for at least nine of the ten tax years preceding the transfer can opt in. No minimum wealth or income threshold is required, although the regime is designed for individuals with substantial foreign assets and income.
How long does the neo-resident regime last?
The regime can be maintained for a maximum of fifteen years from the transfer of residence and is not renewable beyond that period. Income produced in Italy remains subject to ordinary IRPEF taxation throughout.
Can I exclude income from specific countries from the flat tax?
Yes. It is possible to exclude income produced in one or more specific foreign countries from the regime. In that case, such income reverts to ordinary Italian taxation, with a credit recognised for taxes paid abroad.
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