The Italian government has increased the "flat tax" on foreign income for wealthy individuals who become tax residents in Italy. The tax, previously set at €100,000 per year, has been doubled to €200,000. This decision reflects a shift in Italy's stance on attracting wealthy residents with tax incentives.
Economy Minister Giancarlo Giorgetti expressed the government's opposition to engaging in a "competition with other countries to create tax havens." He highlighted the potential negative consequences of such practices for countries with limited fiscal resources, like Italy.
The move comes as Italy anticipates an influx of wealthy British residents seeking to avoid higher taxes after the UK abolishes its "non-dom" regime. The Italian scheme, introduced in 2017, has already attracted over 1,100 relocations, including notable figures like footballer Cristiano Ronaldo.
While the increased flat tax could generate additional revenue for Italy's public finances, it has faced criticism from the EU Tax Observatory, which labeled it as unjust and harmful to state accounts.
The doubled tax rate will only apply to new applicants, sparing those who have already established their tax residency in Italy. The government's decision reflects a growing global debate on tax havens and fair taxation for the wealthy.
