Here below is a focus on the Italian impatriate tax regime reformed on 1st January 2024 leading to a tightening of the eligibility conditions as well as the applicable tax regime:
- Stricter eligibility criteria;
- Shorter duration;
- Reduced tax allowance
- Tolerance measures
Comparative table between the old and new impatriate tax regime
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Old regime applicable until 31.12.2023 |
New regime applicable since 01.01.2024 |
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Eligibility conditions |
• Not having been considered as an Italian tax resident during the 2 tax years preceding the return to Italy;
• Commit to remain an Italian tax resident for at least 2 years;
• The professional activity must be carried out mainly in Italy during the tax period (>183 days). |
• Not having been considered as an Italian tax resident during the 3 tax years preceding the return to Italy;
• Commit to remain an Italian tax resident for at least 4 years;
• The professional activity must be carried out mainly in Italy during the tax period (>183 days);
• In case of intra-group transfer or home-based working from Italy for the same foreign employer, the employee must have at least 6 years of seniority in the foreign company, or even 7 years if the employee was already working in Italy before his departure abroad;
• The employee must be highly qualified or specialized (criteria provided for by decrees). |
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Tax benefit from the regime |
A 70% rebate is applicable on taxable income (no income ceiling). For taxpayers living in certain regions of Southern Italy or having 3 dependent minor children, this rebate is increased to 90%. |
A 50% rebate, increased to 60% for taxpayers with at least one dependant minor child, is applicable on taxable income but limited to an annual income ceiling of EUR 600.000. |
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Tax regime duration |
The benefit of the regime applies for an initial period of 5 years.
A 5-year extension is possible for taxpayers with dependent minor children or who have purchased a property in Italy. |
The benefit of the regime applies for an initial period of 5 years.
(A 3-year extension is possible for taxpayers who have purchased a property in Italy before 31st December 2023 with the intention to move in 2024 / becoming Italian tax residents => very limited cases). |
Tolerance measures
The Italian legislator has introduced some tolerance measures:
- Taxpayers already benefiting from the old impatriate tax regime will continue to do so until the regime expires. The new 2024 regime does not apply to them.
- Taxpayers who transfer their tax residence to Italy during the second half of 2023 (before December 31, 2023) will be able to benefit from the old impatriate tax regime (2023 regime).