Is Italy a tax haven? From Scrooge to Pensioner: The Identity of Those with Record Tax Deductions

Listen to the audio version of the article

There are those who pay only 10% of the income earned in Italy and if things get really bad, they calculate taxes due on only 50% of their annual income. On the other hand, there are those who, like the good miser, pay, thanks to their availability, a total of 100 thousand euros to close the tax account, or even those who leave 7% of their pension to the treasury. They are 37,331 taxpayers who, by transferring their residence to Italy, have found their tax haven. At the end of April, the Ministry of Finance updated the numbers of taxpayers benefiting from the special regulations of the Italian tax system introduced to bring back to Italy professionals and employees who are expatriates or who are still retired or new wealthy residents, and published the relevant data for 2023 tax returns on the website for the tax year. 2022.

The misers are approaching a thousand

The number of newly wealthy residents who have chosen Italy to live in is approaching a thousand. From the latest tax returns available, it emerges that there are a total of 957 misers declared to the tax authorities, 46% of these people having a total income of €75 million in Italy, consisting mainly of income from work (equal). to 86% of the total). The subsidized system, in force since 2017, provides for natural persons who move to Italy and opt for the new resident subsidy, regardless of whether they carry out a certain business activity, the application of an alternative tax on income produced abroad calculated as a flat rate equal to 100,000 euros per period. tax in which the option is valid. The benefit can also be extended to family members. For the latter, the flat tax is reduced to €25,000. The option is revocable, and in all cases its effect ceases after fifteen years from the first valid tax period, and it cannot be combined with the benefits of the return of teachers, researchers, and expatriates. For income produced in Italy, taxes remain normal.

Retirees, I’m going south

To compete with Portugal, since 2019 Italy has also offered a radical tax cut for foreign retirees moving to Italy. But not in all of Italy. In fact, the benefit is available if the pensioner obtains a new Italian residence in one of the municipalities of the regions of Sicily, Calabria, Sardinia, Basilicata, Abruzzo, Molise and Puglia, with a population of not more than 20,000 inhabitants. The deduction afforded is particularly welcome given that in Italy nothing is paid on 93% of the pension from a foreign source and an alternative tax rate of 7% can apply. The tax haven of Southern Italy and the Islands was chosen, again according to data for the 2022 tax year (2023 returns), 474 individuals declared foreign pension income in the amount of €19 million (€40,210 on average) and total income from foreign sources of €28.7 million. The announced alternative tax was close to 2 million euros.

Expatriate professors and researchers

The subsidized system for bringing talent and workers to Italy also witnessed more than one change at the beginning of the year with the implementation of the tax reform and in particular with the International Tax Decree that led to a 50% reduction in the subsidized system. Not for all employees. In any case, the photo taken by the Ministry of Finance with the latest available returns highlights that in 2022 teachers and researchers affected by the tax exemption of 90% of income were more than 3,300 with an average total amount of 56,492 euros. , while the ipatriati system has more than 32,600 employees with an average total amount of employment of 114,501 euros.