In any case, it is advisable to apply for an advance ruling from the Italian tax authorities. In order to be eligible for this tax regime it is necessary to carry out the option through the annual Italian tax return. In addition to the taxpayer, each family member could be subject to a flat forfeiture substitutive tax on non-Italian sourced income at a lower fixed amount of EUR 25,000.

financial monitoring obligations through the Italian tax return (meaning that the individual is not required to declare one's foreign investments into the Italian tax return).

the wealth tax on real estate and financial investments owned out of Italy, and.

the income tax on foreign investments (foreign interests, dividends, and capital gains) with the exception of capital gains on qualified participation earned in the first five years.

The mentioned tax regime will also apply on: Individuals who transfer their tax residency (see the Residence section for more information) from abroad to Italymay elect for the application of a flat substitutive tax, at a fixed amount of 100,000 euros (EUR) (hereinafter the ‘neo-domiciled tax regime’).

Tax resident individuals are required to declare all their foreign investments (financial and not) for monitoring purposes through the Italian tax return. Tax resident individuals are also subject to 'wealth tax' on real estate and on financial investments owned outside of Italy ( see the Other taxes section for more information). deriving from real estate owned outside of Italy, foreign dividends and interest, foreign compensation and director’s fees, and other foreign income). Therefore, tax residents are also subject to taxation on foreign incomes (e.g. Tax resident individuals are liable to the Italian personal (or national) income taxes on their income wherever produced (under the so called ‘worldwide principle’). According to the Italian tax law, both Italian residents and non-resident individuals are subject to taxation in Italy, but on a different basis.

The tax status of an individual is the starting point for applying the correct taxation in Italy. The tax liability shall be computed on a progressive rate, and the applicable tax rates are shown below ( see National income tax). In Italy, the individual is subject to the following income taxes: The main income tax levied on individuals is the personal income tax (PIT), also known as the Imposta sui redditi delle persone fisiche (IRPEF).

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