Edited by Pasquale Salvatore and Gianluigi Bizioli
Article 2 of the Law Decree 9 August 2024, n. 113 entitled “Urgent measures of a tax nature, extensions of regulatory deadlines, interventions of an economic nature, as well as in favor of public administrations and territorial entities”, also known as the “Omnibus Decree”, has doubled the amount of the substitute tax, from euro 100,000 to 200,000 euros, payable by new residents following the application of the regime referred to in Article 24-bis Italian Income Tax Act (“IITA”).
This provision provides a special regime for individuals who transfer their tax residence to Italy pursuant to Article 2 IITA. In particular, it allows new eligible residents to opt for the application of an annual substitute tax (“Flat Tax”) on income produced abroad; income produced in Italy is subject to the (ordinary) progressive rates. The regime can also be extended to one or more family members with the payment of an annual tax of 25,000 euros on income from foreign sources.
The amendment approved by the Council of Ministers consists in doubling the substitute tax to 200,000 euros.
As required by the Article 2 of the Law Decree No. 113 of 2024, the new measure will be applicable only to those who transfer their civil residence to Italy, pursuant to Article 43 of the Civil Code, “after the date of entry into force of the decree”, i.e., from 10 August 2024.
The modification therefore generates two different temporal periods of application of the regime. Those who opted, meeting the requirements, before 10 August 2024, will have to pay 100,000 euros for the entire duration of the benefit (15 years). Otherwise, those who opt for the regime after 10 August 2024, i.e., from the 2025 tax period, will have to pay a substitute tax of 200,000 euros.
The Law Decree shall be converted into Law by the Parliament within 60 days.
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