Restyling of the tax regime applicable for individuals transferring their tax residence to Italy: “the Impatriate regime”


Based on draft legislation approved by the Italian government on 16 October 2023, the tax relief for impatriate individuals (“the Impatriate regime”) may potentially be subject to a major overhaul that would limit its scope of application.

New tax relief proposal

According to the draft legislation, for individuals who transfer their tax residence to Italy as of 1 January 2024, the Impatriate regime would apply as follows:

  • the exclusion from taxable income of 50% of income from employment or self-employment produced in Italy, up to a maximum of EUR 600,000
  • eligible individuals are those who have transferred their tax residence to Italy and meet the following conditions:
    • specific requirements of high qualification or specialisation
    • not tax-resident in Italy for tax purposes for the last 3 years
    • undertake to remain tax-resident in Italy for at least 5 years
    • not been employed abroad by a company belonging to the same group as the (new) Italian employer.

The tax relief can be elected as from the year in which the tax residence is transferred to Italy and it will continue to apply for the following 4 years.

Major changes from the current regime
The new Impatriate regime provides for more restrictive measures than the current regime. The major differences can be summarised as follows:

  • limitation of tax relief only to individuals in possession of the requirements of high qualification or specialisation
  • reduction of the quota of income excluded from the overall taxable base (from 70-90% to 50%)
  • introduction of a “cap” (equal to EUR 600,000) for the income that can benefit from tax relief
  • extension of the requirements relating to:
  • years of tax residence abroad (now 3 years)
  • maintenance of tax residence in Italy (at least 5 years)
  • limitation of the tax relief to new employment relationships.

The draft legislation may be subject to changes during the parliamentary debate before it is enacted. Among these changes, the government has already announced that transitional provisions will be introduced to allow those who have moved to Italy in the second half of 2023 to benefit from the current tax relief.

In case of questions, please do not hesitate to contact a member of our team.