A special tax regime has been just introduced in Italy, effective from January 1, 2019, in favor of retired individuals who receive a foreign pension, decide to move in Italy and meet the following conditions:

1. they were never resident in Italy during the 5 (five) fiscal years previous the request for the special tax regime;
2. they live in a foreign country which signed an administrative convention/treaty with Italy for the exchange of information;
3. they move to one of the territories (Comuni) with other than 20.000 inhabitants of the following regions in southern Italy: Sicilia, Sardegna, Calabria, Campania, Basilicata, Abruzzo, Molise and Puglia;
4. they fill in the above mentioned request to the Italian tax authorities before the presentation of the Italian tax return related to the FY in which they become resident in Italy

According to Italian law n. 145 of December 30, 2018, starting from the fiscal year in which they became resident in Italy until the following 5 (five) fiscal years, the new resident:

• shall pay in Italy a substitutive tax (all inclusive) on their foreign income, equal to 7% for each fiscal year;
• shall pay the ordinary Italian tax on any Italian income;
• shall be exempt from the payment of IVIE (tax on real estate abroad) and IVAFE (tax on financial assets abroad):
• shall be taxable for inheritance and gift tax purposes also with reference to the assets located abroad (according to the world wide principle)

Further, the new resident will be entitled to ask for the application of the ordinary tax regime with reference to foreign income produced in one or more foreign country in order to benefit of the foreign tax credit.

We hope the special regime shall be extended also to other Italian regions.