The sparks between the two neighbors continue to fly, France and Italy. Last night the French Prime Minister Francois Bayrou, pressed and unnerved by the issue of the vote of confidence that awaits his government on September 8th, with a clever distractive maneuver shifts the argument to Italy, accusing it of practicing a “tax dumping policy“. Giorgia Meloni's response was not long in coming: Palazzo Chigi rejected the claims, calling them "totally unfounded", underlining that if anything, the attractiveness of the Italian economy derives from Italy's stability and credibility and not from undue fiscal advantages. But the Prime Minister also added a key detail: theflat-rate tax burden for individuals who transfer their residence to Italy, in force since 2016, it was even doubled.
The episode, however, goes beyond a simple diplomatic incident and touches a a sensitive nerve of the entire European Union: the merciless tax competition between Member States. Meloni, responding to Bayrou, reversed the accusation, highlighting how it is rather Italy, but also France itself, that has been penalised for years by the so-called "European tax havens", which take away huge resources from the public coffers. Indeed, France should join Italy in battle in Europe against those member states that, with the complicity of others, practice systematic fiscal dumping. Other government officials have echoed this line, from Minister Tajani to the League, which has called it a "serious and unacceptable attack on Italy."
Bayrou pressed on budget and taxes for the French
It is a bad time for Bayrou, the French prime minister and centrist leader of the Mouvement Démocrate (MoDem) who the last week has decided to play ahead of the game: it has called an extraordinary National Assembly for September 8, a few weeks before the natural resumption of parliamentary work, to present the 2026 budget to the deputies and immediately ask for the confidence, invoking Article 49.1 of the Constitution. At that point either Parliament approves the 44 billion savings plan, or the government will be forced to resignA very high risk move, because Bayrou does not have a solid majority and France could find itself facing a new early vote.
During last night's television interview Bayrou was cornered right on the maneuver and in particular on the proposal of increase taxes on the richest citizens to restore the state budget. To justify his opposition, he said that the wealthiest taxpayers would leave France because of a sort of "tax nomadism“That's where the Prime Minister tried to get out of the window. diverting the conversation to Italy accusing her of implementing a policy of “tax dumping“, that is, to attract French citizens with a more advantageous tax system, in fact accusing it of unfair competition and opening a new front of diplomatic tension between Rome and Paris.
Should the Ronaldo Law be considered “tax dumping”?
What did the French Prime Minister mean by his accusations against Italy? He probably mistakenly referred to the so-called "Ronaldo law“. Let's see what it's about. In recent years Italy and Milan in particular has become one of the favorite destinations for super rich people around the world. Forecasts indicate that our country could even displace Montecarlo, the Switzerland or UAE as the new "golden cradle" of taxation. The secret lies in a tax treatment tailored specifically for millionaires: an annual flat tax to be paid regardless of the amount of foreign income.
Introduced in 2017 with art. 24-bis of the Tuir, the rule is known as “CR7 law”, launched by the Renzi government, so called because it allowed Cristiano Ronaldo to move to the Juventus paying a “symbolic” and flat tax on all income from abroad: a flat tax of 200 thousand euros on all foreign income (100 until last year), on bond interest, dividends from shareholdings, and capital gains from the sale of businesses, with exemption from inheritance tax on non-Italian assets. Eligible individuals are: were not tax residents in Italia per at least 9 of the last 10 years. It is possible to extend the benefit also to family members with an additional fee of 25.000 euros each. The duration is 15 years and does not involve any capital or productive investment constraints.
According to official data, in 2023 approximately 1.500 people (including owners and family members) joined, generating revenues of 117,6 million euros. 2020 al 2023 The taxpayers involved were almost 4.000, with a total revenue of just over 315 million. The boom is also linked to the fact that in UK The "non-dom" regime, which favored non-domiciled residents, has been abolished. Thus, starting in 2025, another 3.600 millionaires are expected to arrive in Italy, attracted by a seemingly more advantageous tax system.
But can this "Ronaldo law" be considered "tax dumping"? According to legal experts, no. The abuse, regulated by Article 10-bis of the Taxpayer's Bill of Rights, occurs when creating artificial constructions, as a company in a tax haven, without having any real economic activity, with the sole purpose of obtaining an undue tax advantage, experts say.
Instead it is about legitimate tax savings when it represents the taxpayer's freedom to choose, among various options offered by law, the one that is fiscally least burdensome. Case law has repeatedly confirmed that if a legal system provides for aadvantageous alternative, such as a favorable tax regime to attract residents or the transfer of headquarters to a province with favorable tax rates, there is no question of abuse. Italian attraction policies fall into this second category, being optional and transparent regimes, far from artificial constructs lacking economic substance, say legal experts.
The raw nerve of European legislation: the real unpunished tax havens.
instead some EU member states they built their entire economy on a aggressive tax competition, offering low corporate tax rates and secret tax deals (so-called tax ruling) a large multinationals. If anything, these practices erode the tax bases of other countries, such as Italy and, ironically, France itself, shifting billions of euros in profits to jurisdictions with almost no taxation. Bayrou's attack on Italy therefore appears not only unfounded, but also out of place with respect to a a much larger European battle, where France itself would have every interest in collaborating with Italy for a fairer and more coordinated tax system.
Institutions are already taking action. The OECD has also launched the BEPS (Base Erosion and Profit Shifting) project to combat this phenomenon, while the Global Minimum Tax, a European directive, implements a global agreement to introduce a minimum 15% tax on the profits of large companies.
