Italy’s tailor-made tax incentives for global citizens
When Cristiano Ronaldo signed with Juventus FC in 2018, the headlines weren’t just about football. His move also spotlighted Italy’s unique tax regime for inbound residents, quickly dubbed the “CR7 Rule.”
Since then, Italy has expanded and refined its offerings, creating two distinct tax incentives designed to attract high-net-worth individuals and retirees seeking a financially savvy relocation under the Mediterranean sun.
1. Flat Tax Regime for Foreign-Sourced Income
Italy’s flagship incentive allows eligible individuals who transfer their tax residence to Italy to opt for a flat tax on all non-Italian income.
Key Features:
- Flat rate: €100,000 annually (raised to €200,000 from 2025 for new entrants).
- Eligibility:
- Must not have been tax resident in Italy for at least 9 of the previous 10 years.
- Must formally transfer tax residence under Italian law.
- Election made via the annual tax return.
- Duration: Up to 15 years.
- Scope:
- Applies to all foreign-sourced income.
- Italian-sourced income taxed under ordinary rules.
- Family members can be included for an additional €25,000 per person annually.
This regime is particularly attractive to international executives, entrepreneurs, and athletes seeking clarity, stability, and lifestyle value within a compliant European framework.
2. 7% Tax Regime for Retirees in Southern Italy
A separate regime targets foreign retirees relocating to smaller municipalities (under 20,000 inhabitants) in Southern Italy or certain earthquake-affected areas in central Italy.
Key Features:
- Flat rate: 7% on all foreign-sourced income (not limited to pensions).
- Duration: 10 years.
- Eligibility:
- No Italian tax residence in the previous 5 years.
- Must relocate to an eligible municipality.
- Additional Benefits:
- Exemption from regional and municipal income taxes.
- No obligation to report foreign assets.
This policy aims to revitalise local economies while offering retirees a blend of fiscal simplicity and authentic Italian lifestyle, a true Dolce Vita with measurable financial sense.
Common Questions from Clients
At Aria Grace Law CIC, we frequently advise on:
- How does the €200,000 flat tax regime compare with the 7% retiree scheme?
- What qualifies as “foreign-sourced income” under Italian law?
- Can these regimes be combined, transferred, or revoked?
- Is property acquisition necessary to consolidate residency?
- Which Italian regions offer the best balance between tax efficiency and lifestyle?
Our Role
We guide individuals and families through these Italian tax regimes, ensuring:
- Full legal and tax compliance.
- Strategic structuring of cross-border income and assets.
- Alignment of wealth planning with lifestyle goals.
Conclusion
Whether you’re a global executive, a retired adventurer, or the next sports legend, Italy might not only capture your heart. It could also comfort your accountant –
because when your tax bill drops to 7%… even spreadsheets start smiling.
