The provision of Agenzia delle Entrate, 8th March 2017, operationalize the provision of Article 1, paragraph 152, of Law December 11, 2016, n. 232 (2017 Legge di Bilancio), which entered into Tuir the article 24-bis.

In essence, a special fiscal discipline (Flat Tax) is introduced as an alternative to the ordinary fiscal discipline in order to encourage investment, consumption and the rooting of families and high potential individuals in Italy by non-residents.

Flat Tax allows to pay the substitute tax on incomes of natural persons in relation to foreign income.

The optional tax regime may be extended to one or more of the instant family.

The substitute tax is equal to EUR 100.000 for each tax year covered by the option and EUR 25.000 for each relative.

This provision is inspired by similar rules already in force in other EU states (UK, Portugal, Ireland and Malta), but the Italian system presents new aspects and more favorable, because it provides a total exemption from inheritance and donation.

In fact, the provision provides that, for open successions and donations made in the tax period in which the option is valid, inheritance and donation tax is due only for existing goods and rights in the State at the time of succession or inheritance.

It is an innovative tax exemption on transfers of assets located abroad.


The requirements to access are related, primarily, to the absence of residence in Italy for nine of the last ten years.


Taxpayers who have the requirements can join the new tax regime at the time of submission of the individual income tax return related to the tax period in which it was transferred the fiscal residence in Italy or the following. It can also submit a specific prior request to the Central Assessment of the Revenue. The request can be:

– hand delivered;
– sent by registered mail
– sent by certified mail.

For non-residents without domiciliary in Italy, the request can be sent by ordinary mail.


In the request the taxpayer must indicate:

  • the personal data and, if already assigned, the tax code, in addition to its home address in Italy, if already resident; – status of non-resident in Italy for nine of ten last years;
  • the jurisdiction or jurisdictions in which whoever had the last fiscal residence;
  • the states or overseas territories for which it doesn’t want enjoy the Flat Tax.

The taxpayer must also complete a check list.


Flat Tax scheme can be extended to one or more family members in possession of the requirements, through a specific indication in the individual income tax return related to the tax period in which relatives moved the fiscal residence in Italy or in the following. In this case the replacement tax is equal to EUR 25.000 for each relative.


The option must be exercised within the limits for submission of the individual income tax return. The application may be filed even if they are not time-barred to transfer fiscal residence in Italy. The option shall be automatically renewed from year to year, while the effects end, as well as following the will expressed by the taxpayer, fifteen years elapsed from the first tax period of validity.


The payment of Flat Tax must be made in a lump sum for each fiscal year. The deadline of the payment correspond with the payment of individual income tax.


Article 53 of the Italian Constitution says that “every person shall contribute to public expenditure related to their ability to pay. Italian tax system is based on criteria of progression”. That means: more you earn, more taxes you pay. The Flat Tax seems to show how the Italian State decides not to apply the principles of its tax system. However, this behavior of the State can be explained looking to international stage: the United States will adopt an aggressive fiscal policy to attract investments and assets, but also to bring in to the country the multinational corporations. Britain will be just as active in using fiscal leverage to become attractive after Brexit. In Europe there are more constraints of any other jurisdiction, but there are countries such as the Netherlands and Ireland that are very attractive. Italy in this scenario has to decide to compete with other countries or not.

Contributed by: Dr. Pier Luigi Brogi, of BGSM & Partners, E: W: