Contact

News & Insights

Portugal Inspires Italy’s Flat-Rate Tax Regime for Expats

Italy looks to Portugal to attract expats

From 1 January 2019 the Italian government introduced a tax break for certain retirees that entitles them to a 7% flat-rate tax for five years as well as exemption from the more stringent foreign asset reporting requirements. The scheme is available to new and recent expat retirees in Italy who decide to reside in a town with less than 20,000 inhabitants situated in one of the following regions:

  • Abruzzo
  • Basilicata
  • Campania
  • Molise
  • Puglia
  • Sardinia
  • Sicily

All income from foreign assets for people in such circumstances will be subject to the flat rate tax, and without the normal reporting requirements on foreign assets a further tax liability is reduced.

Restrictions

To be eligible for the regime, you must not have been an Italian tax resident for five tax years and must have pension income that stems from a non-Italian source – for example, a SIPPs or QROPS. The special tax regime means expat retirees in Spain will be exempt from income tax, local taxes and wealth tax

Once the 7% flat rate tax period expires the standard rates will apply.

Inspired by Portugal

The move comes as a response to a similar Portuguese scheme which has been successful in attracting up to 100,000 new resident expats to the country over the last ten years, adding several billion Euros to the Portuguese economy in the process.

The Italian scheme is designed to attract expat retirees as well as high-net-worth Italians who might otherwise emigrate to more favourable jurisdictions, including Portugal. However, in Portugal the tax-break regime lasts for 10 years and all other income is subject to a flat-rate of 20% during the qualifying period.

With this in mind, if you are thinking of relocating to Italy to benefit from the new scheme, it is advisable to first receive a review of your wealth and financial circumstances to establish whether this particular route would be financially beneficial.

Blacktower – expat financial advisers in Italy

Blacktower Financial Management provides expat financial advice across Europe. We can help you understand how to best structure, grow and protect your investments and pensions while also helping you plan your expat tax liability.

For more information contact us today.

This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.

Other News

What are the government stimulus packages and what do they actually mean?

Keith LittlewoodDuring these unprecedented times the Corona Virus pandemic has impacted so many lives in so many ways.  The fact that every country in the world is affected and having to take measure to help support their economy will have such profound long-term consequences that governments are forced to take actions never before seen.  You have probably seen the headlines: Australia pumping $66Billion into their economy, Spain €200 Billion, UK £500 Billion, USA $2Trillion, the list goes on.

Read More

Family Court rules on QROPS pension

Fife pound notesA judge at a UK court has ruled that limitations in the law mean divorcing partners cannot make claims for the QROPS pensions of their British expat ex-partners.

This ruling relating to overseas QROPS pensions was reached in the High Court as part of the protracted and embittered divorce settlement of Amit and Ankita Goyal.

The couple divorced during the summer of 2013 and an earlier court hearing in October 2015 ruled that the husband should pay a financial settlement to his wife. However, it was not until the High Court decision in October 2016 that clarity was offered in respect of the husband’s £87,000 India-based QROPS pension.

Read More

Select your country

Please select your country of residence so we can provide you with the most relevant information: