Italian government introduces flat tax for rich foreigners
ROME--The Italian Treasury has confirmed the introduction of a flat tax rate for the super rich looking to live in Italy.
For years, the British government have offered big earners from across the world a special “non-domiciled” status, allowing them to take their fiscal residence in the capital and pay a tax of only £65,000 on income made abroad. However, in the light of Brexit, the special non-dom status previously granted to foreigners is soon to come to an end. From April, those who have lived in the country for more than 15 years will have to pay the same taxes as all other residents, affecting some 116,000 residents who contribute €8 billion to the British economy annually. This is where the Italian government comes in, planning to poach these high flyers and the internal revenue they bring with them.
The income revenue authority has now made it possible for foreigners to move to Italy and pay a flat tax rate of only €100,000 on all income made abroad, and a further €25,000 for every family member who also wants to register their fiscal address in Italy. The rules are more or less the same as for the non-dom tax in the UK. It’s predicted to do well in Italy, given that it appeals largely to Arab and Russian businesspeople, who already spend summers in Lake Como and Chianti.
However, people wanting to participate in this scheme will have to have a net worth of at least €15 million, according to Stephen Loconte, from the firm “Loconte & Partners”, in order for it to be beneficial for the Italian government. The flat tax is only paid on income made abroad, while any money made in Italy would be taxed at a normal rate.
The scheme aims to attract rich rentiers, rather than Italians who have previously moved abroad for tax purposes. Indeed, Italians wishing to return must prove that they have been residents in a foreign country for at least nine years in the past decade.
The idea of the peninsula becoming a tax haven has received mixed reviews from prominent Italians, with fashion designer Versace commenting that attracting the wealthy brings advantages for all, while the Communist Party leader, Marco Rizzo, sees it as "socialism for the rich". In any case, if, unbelievably, every one of the 100,000 high flyers currently living in London were to move to Italy, the state would make €10 billion.