Italy · Tax regime
Substitute Tax for New Residents (Article 24-bis TUIR)
RAISED TWICE IN 18 MONTHS. Originally EUR 100,000. Doubled to EUR 200,000 by Article 2 of Law Decree No. 113 of 9 August 2024 for those transferring residence from 10 August 2024. Raised again to EUR 300,000 by the 2026 Budget Law, approved 30 December 2025, for individuals transferring legal residence from 1 January 2026. The family member charge rose from EUR 25,000 to EUR 50,000. Cohorts are grandfathered at their entry rate: 2024 electors keep EUR 100,000; those resident by 31 December 2025 keep EUR 200,000.
Tripling the entry price in eighteen months is the story. Italy has decided this regime is for the genuinely enormous balance sheet and is happy to lose everyone else — and at EUR 300,000 plus EUR 50,000 per head, Greece's EUR 100,000 plus EUR 20,000 is now a third of the cost for a comparable Mediterranean life. What Italy still offers that Greece does not is the inheritance tax shelter: foreign assets sit outside Italian succession tax for the regime's duration, which for a family with a nine-figure estate can dwarf the annual charge.
Qualifying routes
flat annual substitute tax on all foreign-source income
raised from EUR 25,000
resident by 31 December 2025; EUR 25,000 per family member
elected in 2024; EUR 25,000 per family member
The facts
- Qualifying figure
- €300k
- Total landed cost
- EUR 300,000 per year for the principal plus EUR 50,000 per family member, for up to 15 years. A family of four entering in 2026 pays EUR 450,000 annually — EUR 6.75m over the full term. No qualifying investment is required.
- Physical presence
- Italian tax residence required — over 183 days, or habitual abode/registered residence under Article 43 of the Civil Code
- Family
- spousechildrenparentssiblings and other defined relatives — each at EUR 50,000
- Permanent residency
- n/a — a tax regime layered on an immigration status
- Citizenship
- n/a; years of legal residence count toward the 10-year naturalisation requirement
- Language test
- B1 Italian for naturalisation
- Dual citizenship
- Permitted
- Requirements
- transfer of tax residence to Italynot tax resident in Italy for at least 9 of the 10 years preceding the transferelection in the tax return; optional advance ruling from the Agenzia delle Entratepayment of EUR 300,000 (2026 cohort) by the ordinary income tax deadline each yearEUR 50,000 per additional family member included
- The rate has moved twice. Assume it can move again — this is now demonstrably a political variable, not a fixed term, and nothing in the regime binds Parliament for your 15 years. Model a further increase.
- Grandfathering attaches to when you transferred residence, not when you filed. Anyone who moved civil residence by 31 December 2025 keeps EUR 200,000; a day later costs EUR 100,000 a year for up to 15 years.
- Italian-source income is entirely outside the regime and taxed at up to ~47.2%.
- Capital gains on qualified shareholdings are excluded from the substitute tax for the first five years — a well-known trap for founders planning an exit shortly after arrival.
- Foreign tax credits are not available against the substitute tax; foreign withholding is pure leakage.
- Cherry-picking jurisdictions out of the regime is possible but irrevocable for those states, and doing so re-exposes that income to full Italian tax and to IVIE/IVAFE.
- Italy applies CFC rules and an exit tax; the regime does not disapply them for corporate structures.
- 15-year hard limit, no renewal, and revocation for non-payment is retrospective in effect.