ITALY Trends and Developments Contributed by: Guglielmo Maisto, Marco Cerrato, Alessandro Bavila and Stefano Tellarini, Maisto e Associati
The regime was introduced by Article 16 of Legislative Decree No 147 of 14 September 2015 (the “Former Impatriate Regime”) and was later significantly revised by Legislative Decree No 209 of 27 December 2023 (the “New Impatriate Regime”). Key changes included a reduction of the exemption from 70% to 50%, the introduction of a EUR600,000 cap on eligible gross income, and an extension of the minimum non-resi - dence period from two to three tax years (increasing to six or seven years in intra-group relocations). Under the Former Impatriate Regime, its combination with the Forfait Tax Regime was expressly prohibited. However, when the New Impatriate Regime came into force in 2024, the incompatibility rule was not updat - ed, thereby creating uncertainty as to whether the two regimes could be applied together. Clarification first came with Italian Revenue Agency Ruling No 16 of 28 January 2025, which confirmed the possible combination of the Forfait Regime with a sim - ilar regime applicable to professors and researchers, despite a prior prohibition. Based on this approach, the Revenue Agency implicitly accepted that, in the absence of a new incompatibility rule, the Forfait Regime and the New Impatriate Regime could also be applied together, provided all requirements were met. This interpretation was later confirmed in several unpublished rulings. The issue was ultimately resolved by Article 2 of Decree-Law No 38 of 27, that extended the incom - patibility rule to both the Former and the New Impa - triate Regime, but only for those acquiring Italian tax residence from fiscal year 2027. Such grandfather rule implies that those who became Italian tax residents between 2024 and 2026 may still benefit from both regimes at the same time, provided all conditions are met. Fixed-Interest Trusts and Wealth Tax on Foreign Financial Assets Under Italian tax law, a wealth tax known as IVAFE ( Imposta sul Valore delle Attività Finanziarie detenute all ’ Estero ) applies to financial assets held abroad by Italian-resident individuals and non-commercial entities (including trusts). The tax is generally levied at 0.2% of the value of such assets – typically their
market value in the case of listed securities – rising to 0.4% where assets are held in jurisdictions clas - sified as tax havens for Italian tax purposes. Where assets are held through a foreign trust, the application of IVAFE depends on how the trust is characterised under Italian tax law. In the absence of specific rules, the Italian Revenue Agency already provided clarification in relation to both “disregarded” and “discretionary” trusts (Cir - cular 20 October 2022, n. 34/E). Disregarded trusts are those which are revocable or in which a resident settlor or beneficiaries retain powers to influence the management or disposition of the trust assets (and related income). In such cases, the trust is ignored for Italian tax purposes, and the resident settlor or benefi - ciaries are treated as the direct owners of the under - lying assets, with IVAFE applying accordingly upon them. By contrast, discretionary trusts are treated as autonomous taxpayers. Consequently, the Revenue Agency clarified that IVAFE is due by the trust itself (if tax resident in Italy), while beneficiaries of foreign opaque trusts are not subject to IVAFE on the basis that they hold no ownership rights over the underly - ing assets. Until recently, however, no clear guidance was provid - ed in relation to “fixed-interest trusts”, namely trusts under which beneficiaries are entitled to receive peri - odic distributions of income. This gap raised the ques - tion of whether such beneficiaries could be regarded as holding a relevant ownership interest for IVAFE purposes. Against this background, the Italian Revenue Agency, in Ruling Reply No 84 of 25 March 2026, ultimately put an end to this uncertainty. In that ruling, the Agency clarified that IVAFE does not apply to resident ben - eficiaries of fixed-interest trusts, on the grounds that they do not hold any (direct or indirect) ownership rights over the underlying assets. Rather, the benefi - ciary’s position is limited to a right to receive income, akin to a creditor’s claim, and therefore insufficient to trigger the wealth tax. The ruling enhances the coherence of the framework, clarifying that the decisive criterion is the existence
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