News brief · Taxation
Italy: the €300,000 flat tax attracts billionaires
The Italian lump-sum tax on foreign income attracts the very largest fortunes because it is capped in absolute terms. This mechanism is also its limit: it is only worthwhile above an income level that few taxpayers reach.
By Editorial team · on August 14, 2026
Why a lump sum attracts very high earners
The Italian new residents regime replaces the taxation of foreign income with a fixed amount, regardless of the level of that income. It is not a reduced rate but an absolute cap.
The amount applicable to the most recent transfers is €300,0001 per year. It stood at €100,0002 for transfers before 11 August 2024, then at €200,0003.
The arithmetical consequence is direct: the higher the foreign income, the lower the effective rate. The regime is therefore structurally designed for very large estates, and it loses all appeal below a certain level.
The break-even point is simple to calculate: it lies where the ordinary Italian tax scale, whose top marginal rate reaches 43%4, would produce a tax equal to the lump sum. Below that, the ordinary regime is more favourable.
The conditions, and whom they exclude
The option is reserved for people who have not been Italian tax residents for at least from 9 years5 of the ten preceding the transfer, and applies for a maximum of 15 years6.
The lump sum covers foreign-source income; Italian-source income remains taxed at the ordinary rates. A beneficiary who received Italian rents or carried on an activity in Italy would fall under the ordinary regime for that portion.
Including a family member requires an additional lump sum of €50,0007 per person, an amount that weighs little compared with the main lump sum but must be factored in.
There is an option to exclude certain states, which the taxpayer may choose to leave outside the lump sum, for example to preserve the credit for a foreign tax. This is a technical point decided on entering the regime.
We do not publish the details of the state-by-state exclusion mechanism or the list of jurisdictions for which it is of interest: they do not appear in the extracts we have been able to verify.
What the regime does not settle
The lump sum does not do away with the need to leave France. A taxpayer who kept their household or centre of economic interests in France would remain domiciled there within the meaning of article 4 B of the French General Tax Code (code général des impôts).
For a large estate, departure also triggers the French exit tax. It applies to shareholdings with a total value of at least more than €800,0008, or representing at least more than 50%9 of a company's profits, for someone who has been resident for from 6 years10 of the last ten years.
As Italy is part of the European Union, deferral of payment is automatic. The tax is cancelled after 2 years11 or 5 years12 of ownership, depending on whether the value of the shares is below or above €2,570,00013.
An Italian plan based on a quick sale of shares after departure must therefore be examined carefully: a sale during the holding period makes the exit tax definitively payable.
Italian inheritance tax, on the other hand, is very favourable: 4%14 in the direct line and between spouses, with an allowance of €1,000,00015 per beneficiary. This is an estate planning argument that the lump sum itself does not cover.
What remains uncertain
The amount of the lump sum has tripled in a few years, each time without retroactive effect for those already admitted. This structure protects existing beneficiaries and makes entry more expensive: it creates a premium for moving early.
There is no guarantee, however, that the access conditions themselves, and not just the amount, will not be tightened in future. The regime is highly visible politically, and it is the subject of recurring criticism in Italy as well as at European level.
Finally, this regime should be distinguished from the two other Italian schemes with which it is often confused: the regime for foreign retirees, at 7%16 for 9 years17 in small municipalities in the south, and the regime for inbound workers.
None of the three can be combined with another, and the choice depends on the nature of the income — investment, pension or earned income. An Italian adviser is essential here, and the cost of that advice is negligible compared with the amounts at stake.
Please note
Sources and verification dates
- 1.
Italy, new residents: annual flat tax, moves from 1 January 2026 : €300,000
« la legge di bilancio 2026 ha elevato a 300.000 euro l'importo dell'imposta sostitutiva sui redditi prodotti all'estero da chi si trasferisce in Italia »
agenziaentrate.gov.itVerified on Nov 2, 2026Verified source
- 2.
Italy, new residents: annual flat tax, moves up to 10 August 2024 : €100,000
« per i trasferimenti di residenza avvenuti fino al 10 agosto 2024 l'imposta è stabilita nella misura di 100.000 euro per ciascun periodo d'imposta »
agenziaentrate.gov.itHistorical value, applicable until August 10, 2024
- 3.
Italy, new residents: annual flat tax, moves from 11 August 2024 to 31 December 2025 : €200,000
« l'imposta sostitutiva è pari a 200.000 euro per ciascun periodo d'imposta in cui opera l'opzione »
agenziaentrate.gov.itHistorical value, applicable until December 31, 2025
- 4.
Italy: top marginal IRPEF rate : 43%
« fino a euro 28.000 : 23% ; da 28.001 fino a euro 50.000 : 35% [33 % depuis la loi de finances 2026] ; oltre a euro 50.000 : 43% — 14.140 euro + 43% sul reddito che supera i 50.000 euro. — Agenzia delle Entrate, « Aliquote e calcolo dell'Irpef ». »
agenziaentrate.gov.itVerified on Nov 2, 2026Verified source
- 5.
Italy, new residents: tax periods of non-residence required out of the previous ten : 9 years
« L'opzione è esercitabile dalle persone fisiche che trasferiscono la residenza fiscale in Italia e che non siano state residenti in Italia per un tempo almeno pari a nove periodi di imposta nel corso dei dieci precedenti l'inizio del periodo di validità dell'opzione. — Agenzia delle Entrate, « Opzione per i neo-residenti ». »
agenziaentrate.gov.itVerified on Nov 2, 2026Verified source
- 6.
Italy, new residents: maximum duration of the option, from the first tax period : 15 years
« L'opzione è valida per un massimo di 15 anni dal primo periodo d'imposta di validità dell'opzione »
agenziaentrate.gov.itVerified on Nov 2, 2026Verified source
- 7.
Italy, new residents: annual flat amount per family member included, from 1 January 2026 : €50,000
« e a 50.000 euro l'importo dell'imposta dovuta da ciascuno dei familiari cui sono stati estesi gli effetti dell'opzione »
agenziaentrate.gov.itVerified on Nov 2, 2026Verified source
- 8.
France, exit tax: total value of securities triggering taxation of unrealised capital gains : €800,000
« droits sociaux, titres ou droits atteignant une valeur globale d'au moins 800 000 € ou représentant au moins 50 % des bénéfices sociaux »
- 9.
France, exit tax: share of company profits triggering taxation, regardless of value : 50%
« droits sociaux, titres ou droits atteignant une valeur globale d'au moins 800 000 € ou représentant au moins 50 % des bénéfices sociaux »
- 10.
France, exit tax: period of tax domicile required in the ten years preceding departure : 6 years
« vous avez été résident fiscal français pendant au moins six ans au cours des dix années précédant le transfert »
- 11.
France, exit tax: period before relief for securities holdings below the threshold : 2 years
« 2 ans pour les contribuables dont la valeur des titres dans le champ de l'exit tax est inférieure à 2.570.000 euros »
- 12.
France, exit tax: period before relief for securities holdings above the threshold : 5 years
« 5 ans pour ceux dont la valeur est supérieure »
- 13.
France, exit tax: value of securities holdings separating the two relief periods : €2,570,000
« 2 ans pour les contribuables dont la valeur des titres dans le champ de l'exit tax est inférieure à 2.570.000 euros ; 5 ans pour ceux dont la valeur est supérieure »
- 14.
Italy: inheritance tax rate in the direct line and between spouses : 4%
« 4% per i trasferimenti in favore del coniuge o di parenti in linea retta (ascendenti e discendenti), da applicare sul valore complessivo netto eccedente, per ciascun beneficiario, la quota di 1 milione di euro »
agenziaentrate.gov.itVerified on Nov 2, 2026Verified source
- 15.
Italy: allowance per beneficiary on inheritances in the direct line : €1,000,000
« 4% per i trasferimenti in favore del coniuge o di parenti in linea retta (ascendenti e discendenti), da applicare sul valore complessivo netto eccedente, per ciascun beneficiario, la quota di 1 milione di euro. — Agenzia delle Entrate, « Imposta di successione – Aliquote e franchigie ». »
agenziaentrate.gov.itVerified on Nov 2, 2026Verified source
- 16.
Italy, foreign retirees: substitute tax rate on foreign-source income : 7%
« prevede l'applicazione di un'imposta sostitutiva dell'Irpef con aliquota del 7% a qualsiasi categoria di reddito prodotto all'estero, per ciascuno dei nove periodi d'imposta di validità dell'opzione (articolo 24-ter del Tuir). »
agenziaentrate.gov.itVerified on Nov 2, 2026Verified source
- 17.
Italy, foreign retirees: number of tax periods covered by the option : 9 years
« l'applicazione di un'imposta sostitutiva dell'Irpef con aliquota del 7% a qualsiasi categoria di reddito prodotto all'estero, per ciascuno dei nove periodi d'imposta di validità dell'opzione (articolo 24-ter del Tuir). — Agenzia delle Entrate, « Regime opzionale per i pensionati esteri » (mise à jour du 8 mai 2026). »
agenziaentrate.gov.itVerified on Nov 2, 2026Verified source