ITALY Trends and Developments Contributed by: Guglielmo Maisto, Marco Cerrato, Alessandro Bavila and Stefano Tellarini, Maisto e Associati
Maisto e Associati Piazza F. Meda 5 20121 Milan Italy Tel: +39 0277 6931 Email: milano@maisto.it Web: www.maisto.it
The Forfait Tax Regime: Updates Increase of the flat tax
Regime and reserving it for effective HNWIs, while sidelining a broader “high-income” segment that could have driven mass relocations to Italy. Despite the higher rates, the Forfait Tax Regime remains one of most compelling tax incentives avail - able to globally mobile HNWIs and, combined with a broader set of pro-expat measures (including the Italian “investor visa”), continues to position Italy at the forefront of the international competition for pri - vate wealth. This is also confirmed by official data released by the Italian tax authorities and analysed in a recent study, which shows that more than 550 individuals relocated to Italy under the regime in 2025 alone (see Assonime, Note e Studi No 7/2026). As further evidenced by the same study, the population of new residents benefiting from the regime has accord - ingly grown to approximately 2,500, among whom the United Kingdom was the most common jurisdiction of previous tax residence (a finding that likely reflects the abolition of the UK’s so-called res-non-dom regime in 2024), while France was the most frequently repre - sented nationality. Against this backdrop, the grand - fathering mechanisms introduced alongside both increases reflect a clear commitment to ensuring cer - tainty for those taxpayers already benefiting from the Forfait Tax Regime, thus sending a reassuring signal. Cumulation between the Forfait Tax Regime and the New Impatriate Regime Beyond the Forfait Tax Regime, Italy offers a dedi - cated inbound workers regime, granting partial tax exemption on Italian employment and self-employ - ment income to qualifying new residents working in Italy for most of the year (“Impatriate Regime”).
Law No 199 of 30 December 2025 (the “2026 Budget Law”) has increased to EUR300,000 (and EUR50,000 for each family member to whom the regime is extend - ed) the annual substitute flat tax on foreign income available to new-resident individuals, under the so- called “Forfait Tax Regime”. This latest increase comes hot on the heels of another increase in August 2024, when the flat tax was doubled from EUR100,000 to EUR200,000 – while the EUR25,000 tax for each fam - ily member covered by the regime was left untouched. Consistently with the 2024 increase, the 2026 Budget Law provides for a grandfathering clause: the higher rates hit only those moving their civil law residence to Italy from 1 January 2026. Those who relocated earlier, by contrast, are shielded and continue to enjoy the previous lower amounts. For the purposes of the grandfathering clause, the relevant notion of “residence” is determined by refer - ence to Article 43 (2) of the Italian Civil Code, which defines it as the place of an individual’s habitual abode. According to settled Supreme Court case law, “habitual abode” requires both an objective element – regular and continuous physical presence – and the subjective intention to establish a principal home in Italy, inferred from concrete indicators of the effective centre of daily life. Therefore, sole registration with the Register of the Resident Population ( Anagrafe ) rep - resents a purely formal step which does not secure access to the grandfathering treatment unless backed by a genuine relocation to Italy before the increase. From a policy standpoint, the increase clearly signals a strategic goal: tightening access to the Forfait Tax
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