Italy Lump Sum Tax

The Italy Lump Sum Tax Program presents an attractive route for high-net-worth individuals (HNWIs) seeking tax residency in a major European economy while maintaining efficiency and predictability in their global tax exposure. As of 2025, eligible individuals can benefit from a fixed annual tax of €200,000 on all foreign-source income. Family members may also join the program for €25,000 each, making this regime a competitive long-term solution for international families relocating to Italy.

Overview of the Italy Lump Sum Tax Regime

Italy’s lump sum regime was designed to attract wealth and investment by offering a simplified tax alternative to the country’s progressive system. Initially set at €100,000 per year, the flat tax has now doubled to €200,000 annually, marking a policy shift in line with evolving fiscal priorities. This 15-year program remains a standout within the EU for its predictability, optionality, and minimal administrative burden on foreign income.

Key Features of the Program

· €200,000 annual flat tax on foreign income

· €25,000 per family member under the same regime

· Valid for up to 15 consecutive years

· No wealth tax or foreign asset reporting obligations

· Italian-sourced income taxed under normal rules

· Must not have been tax resident in Italy for 9 of the last 10 years

· Optional exclusions: taxpayers may opt out income from specific countries for tax credit purposes.

Establishing Tax Residency in Italy

To access the regime, individuals must become Italian tax residents, typically requiring a genuine relocation and a significant presence in Italy. Proper documentation, habitual abode, and alignment with international tax rules are key to maintaining compliant status.

Alternatives for Partial Relocation or Dual Residency

Some individuals prefer to split time across multiple jurisdictions. EU nationals (or those holding EU residence rights, e.g., via Malta) may legally reside in Italy without formally triggering Italian tax residency. In such cases, they may retain tax residency in another European country—such as Malta or Cyprus—that offers more flexible physical presence requirements and avoids the €200,000 flat tax.

This approach demands careful legal planning to avoid double taxation or unintended tax liability in Italy. Factors such as habitual residence, center of vital interests, and applicable tax treaties must all be considered.

Other European Tax Residency Programs

While Italy’s lump sum program is highly attractive, it is part of a broader ecosystem of competitive European tax residency regimes. Jurisdictions like Portugal, Malta and Switzerland offer alternative pathways with flat tax features, treaty access, and lifestyle flexibility. The ideal choice will depend on your travel habits, asset structures, and succession goals.

How We Can Help

Our firm assists private clients, business owners, and family offices with cross-border tax residency, lump sum program applications, and international relocation planning. Whether you are moving to Italy or considering other EU options, we provide end-to-end legal and tax support to help you make informed, compliant decisions.

Contact us today to explore whether the Italy Lump Sum Tax Program or another European tax residency solution is the right fit for you.

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