Italy offers a “lump-sum taxation scheme” to those who move their fiscal residence into the country
On 7th December the Italian Senate gave green light to the 2017 Budget Bill. After being published on the Official Law Bulletin, the law is to come into full effect on 1st January 2017, with the exception of those provisions for which the law itself sets up a different date.
The parliamentary process of the 2017 Budget Bill was unusually fast, with the Senate approving the same draft which had been previously released by the Italian House, due to the political crisis Italy experienced after the national referendum held on 4th December. Anyway, the political conundrum has already been solved, as the former Minister of Foreign Affairs, Paolo Gentiloni, worked out a new government which rapidly took office.
For sure, the Budget Law the Italian provide the fiscal legislation with some very important changes, amongst which dwells the set-up of a “lump-sum taxation scheme” for those who move their residence into Italy. The new lump-sum scheme is defined into details by clauses from 148 to 159 of article 1 of 2017 Budget Law.
Indeed, a waiver to the general global principles of taxation will apply to the foreign income of the individuals who move their fiscal residence into Italy. Those foreign income will be subject to a “lump-sum levy” which will be calculated upon a steady taxable income of 100.000 euros, a sum bound to increase by 25.000 euros for every further person the familiar unit consists of. Opting into the new taxation scheme will be possibile for whoever have never been resident in Italy, or for whoever have been resident abroad for 9 out of the last 10 years. The lump-sum regime will then last 15 years, but will be immediately ruled out in case the beneficiary even partially dodges tax payments.