The instructions from theInland Revenue for foreigners who intend to transfer their tax residence to Italy benefiting from one substitute tax on income produced abroad.
The option, introduced with the 2017 Budget Law, provides for the payment of a flat-rate tax of 100 euros for each tax period for which it is exercised, in order to attract and encourage the transfer of residence in our country of High net worth individuals, i.e. people with high assets.
With the provision of the director of the Revenue Agency, the check list model to be attached to the request for a ruling was also approved, which allows a preventive assessment by the tax authorities on eligibility for the favorable regime.
Taxpayers in possession of the requisites can join the new regime at the time of presentation of the tax return, referring to the tax period in which the tax residence in Italy was transferred or to the immediately following one.
It is also possible to submit a specific prior request for a ruling to the Central Assessment Directorate of the Revenue Agency. The request can be delivered by hand, by registered mail with acknowledgment of receipt or electronically, using certified e-mail.
The flat-rate scheme can be also extended to one or more family members in possession of the requisites, through a specific indication in the tax return referring to the tax period in which the family member transfers tax residence to Italy or to the following one. In this case, the substitute tax is equal to 25mila euros for each of the family members to whom the effects of the same option are extended.
The option must be exercised within the deadlines for submitting the tax returns, even if the response to the request for ruling has not yet been received from the Revenue Agency. The application can be presented even if the terms for rooting the tax residence in Italy have not yet expired.
The option means tacitly renewed from year to year, while the effects cease, in any case, after fifteen years from the first valid tax period.
The payment of the substitute tax, in the amount of 100 thousand euros, must be made in a single solution, for each tax period in which the regime is effective, by the date set for the payment of the balance of income taxes.
