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.

Other News

Debunking the Myths: Residency

Hand touching globeBritish people make up one of the highest percentages of expats in the world, it is estimated by the World Bank that between 4.5 million and 5.5 million Britons live abroad – around 7-8% of the UK population. Spain has become a firm favourite for people choosing to settle down overseas.

The United Nations Population Division found that over 381,025 official British expats were in Spain during 2013, with even more who are unofficially living ‘under the radar.’

Read More

Finding quality healthcare as an expat

Doctor's white coatIt’s currently winter, which means it’s also cold and flu season. Sometimes, despite trying to avoid the germs as best you can, you just can’t help falling ill. And when that happens, you realise the value of quality healthcare.

For expats who have moved overseas, but can’t yet speak the language of their host country, finding a doctor can be difficult and may be something that requires assistance.

At Blacktower we would always suggest that finding a suitable doctor is a priority and should be high on your list of priorities when working out your expat retirement planning.

Read More

Select your country

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