A special tax regime has just been introduced in Italy, effective from January 1, 2017, in favor of high net worth individuals who decide to move to Italy and meet the following conditions:

• they were never resident in Italy during, at least, nine of the ten fiscal years previous the request for the special tax regime;
• 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 became resident in Italy

According to Italian law n. 232 od December 11, 2016, starting from the fiscal year in which they became resident in Italy until the following 15° fiscal year, the new resident:

• shall pay in Italy a substitutive tax (all inclusive) on their foreign income, equal to Euro 100.000 (Euro 25.000 for each relatives);
• shall pay the ordinary Italian tax on any capital gain realized during the first five years of the special tax regime (for example, sale of shares);
• 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 only with reference to the assets located in Italy (in spite of 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.

The operative rules of this new tax regime and special allowances for visa and permit of stay shall be provided by appropriate ministerial decree.