The short answer: which Italian tax regime fits you?
The short answer
Italy runs three separate special regimes for newcomers, and they target three different people. Workers moving to Italy for a job: the impatriati regime exempts 50% of your employment or self-employment income (60% with a child under 18) for five years, up to €600,000 a year. Very wealthy new residents: the €300,000 annual flat tax (Art. 24-bis) replaces Italian tax on all foreign-source income for up to 15 years — 2026 opt-ins pay €300,000; 2024 opt-ins still pay €100,000 and 2025 opt-ins €200,000. Foreign retirees settling in the south: the 7% flat tax (Art. 24-ter) applies to all foreign-source income for ten years in qualifying southern towns — and since April 2026 the town-size limit rose from 20,000 to 30,000 residents. Ordinary IRPEF in 2026 is 23%/33%/43% plus regional and municipal surcharges.
Italy’s tax incentives are among Europe’s most generous — and among its most misunderstood. Each regime has hard eligibility lines: how long you were non-resident, where you must live, and what income it covers. Get one line wrong and you owe full IRPEF plus penalties. This guide maps all three regimes with the 2026 numbers, illustrative worked examples, and the mistakes that cost people the benefit.
→ How to Open a Bank Account in Italy as an Expat (2026 Step-by-Step)
The three regimes compared: 2026 snapshot
| Regime | Who it targets | Benefit (2026) | Duration | Key condition | Expert Score |
|---|---|---|---|---|---|
| Impatriati (rientro dei cervelli) | Workers moving to Italy | 50% of work income exempt (60% with child under 18), up to €600,000/yr | 5 years | Not tax resident in Italy in the previous 3 years | 9.0/10 |
| Art. 24-bis flat tax | High-net-worth new residents | €300,000/yr replaces tax on all foreign income (2026 opt-ins) | Up to 15 years | Not tax resident in Italy 9 of the last 10 years | 8.0/10 |
| Art. 24-ter 7% | Foreign retirees in the south | 7% substitute tax on all foreign-source income | 10 years | Foreign pension + town ≤30,000 residents in 8 southern regions | 8.5/10 |
Scores below are the editorial judgment of the ExpatMoneyEU Research Team on value-accessibility for typical expats; see the methodology box for criteria. Tax is personal — consult a commercialista for your situation.
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1. The impatriati regime — 50%/60% of work income exempt
Impatriati (rientro dei cervelli) — 2026 rules
This is the regime that matters to most working expats. If you move your tax residence to Italy to work — as an employee or self-employed — and you were not an Italian tax resident in the previous three years, only half of your work income is taxed for five years (60% exemption with a minor child), on up to €600,000 a year. The other half is simply ignored by IRPEF.
Illustrative example: an expat employee earning €80,000 in Milan pays IRPEF on only €40,000 under impatriati — versus the full €80,000 ordinarily. At 2026 IRPEF rates (23% to €28,000, 33% to €50,000, 43% above), that is roughly €8,000–12,000 a year saved — illustrative figures only; actual savings depend on deductions, regional surcharges and INPS contributions. Verify with a commercialista.
The traps: the benefit covers work income only, not investment income; and the three-year non-residence test is strict — a single year of Italian tax residence in the window can disqualify you. Apply through your employer’s payroll or your tax return; the election is not automatic.
→ Best Bank Account for Bangladeshis in Italy — October 2026 Guide
2. The €300,000 flat tax — for the very wealthy (Art. 24-bis)
Lump-sum substitute tax — 2026 rules
The 24-bis regime lets new Italian residents pay a fixed annual sum on all foreign-source income — dividends, capital gains, rents abroad, everything — instead of Italian tax on it. The 2026 Budget Law (approved 30 December 2025) raised the price to €300,000 a year for new opt-ins; earlier opt-ins keep their original rate (€100,000 for 2024, €200,000 for 2025) for the remaining duration. There is no minimum investment requirement — the test is purely the nine-out-of-ten-years non-residence history.
Side benefits: no IVIE/IVAFE wealth taxes on foreign assets, no monitoring-form reporting, and you can exclude specific countries from the election. This regime is not for ordinary expats — it is for the wealthy relocators Italy is courting — but it is the headline number everyone asks about.
→ How to Open a Bank Account in Italy as an Expat (2026 Step-by-Step)
3. The 7% retiree regime — southern Italy (Art. 24-ter)
7% flat tax for foreign pensioners — 2026 rules
The 7% regime is the standout deal for retiring expats: if you hold a pension paid by a foreign entity and move your tax residence to a qualifying small town in one of eight southern regions, you pay 7% on all foreign-source income — pension, foreign rents, investment income — for ten years. The pension is the ticket in, not the limit of the benefit.
The April 2026 expansion matters: raising the town limit from 20,000 to 30,000 residents opened dozens of additional provincial towns — some genuinely attractive ones — that were previously excluded. The constraint is real, though: your residence must be there, not in Rome or Florence, and the population figure is checked against the official census.
Illustrative example: a retiree with €45,000/year in foreign pension and investment income pays roughly €3,150 at 7% — versus ordinary IRPEF of around €10,000–12,000 plus regional/municipal surcharges (23%/33%/43% brackets plus ~1.2–4.2% surcharges). The 7% regime skips the surcharges entirely. Illustrative figures only — get professional tax advice before electing.
→ Best Bank Account for Turks in Italy — October 2026 Guide
Why your bank account matters for the tax regimes
Every one of these regimes assumes you can operate in Italy financially: receive salary or pension, pay the substitute tax, and document your residence. That means an Italian IBAN — employers pay salary into it, the Agenzia delle Entrate debits from it, and landlords trust it. Pair your tax planning with the banking setup: open your Italian account in the right order (codice fiscale first), keep a multi-currency account for cross-border flows, and keep records — the residence test is proven with documents, not intentions.
→ Best Bank Accounts in Italy for Expats — the October 2026 Flagship Guide
How we compared: the methodology
How we compared
Rules checked: Legislative Decree 209/2023 (impatriati), TUIR Arts. 24-bis and 24-ter, the 2026 Budget Law (Law 207/2025), Law 34/2026 (30,000 threshold, in force 7 April 2026), and the October 2026 explainer tables from mbersanilaw.com, taxpilotapp and countrytaxcalc. Criteria and weights: size of tax benefit (35%), accessibility to ordinary expats (25%), certainty of eligibility lines (20%), duration (10%), administrative simplicity (10%). Scores are the editorial judgment of the ExpatMoneyEU Research Team — not tax advice. All worked examples on this page are illustrative figures; tax is personal — verify with a commercialista before electing any regime.
Tax rules change with every Budget Law — we re-check these regimes each January and whenever Parliament amends them.
→ Best Bank Account for Bangladeshis in Italy — October 2026 Guide
Traps that cost people the benefit
- Breaking the non-residence window: one Italian tax-resident year inside the impatriati 3-year window or the 24-bis 9-of-10 window can kill eligibility entirely.
- Wrong town for the 7% regime: 30,001 residents at the official census figure means no benefit — check the ISTAT figure, not the tourist brochure.
- Assuming the election is automatic: none of these regimes apply by default — they must be elected in your tax return or via the proper ruling, with documentation.
- Ignoring double-tax treaties: your home country’s treaty with Italy interacts with every regime here — the 7% regime’s country-exclusion option exists precisely because the flat charge is not always the better answer.
- Ordinary IRPEF + surcharges: remember that outside the regimes, 23%/33%/43% IRPEF is only the start — regional and municipal surcharges add roughly 1.2–4.2% on top.
→ Wise vs Remitly EUR→BDT — October 2026 Transfer Guide
What to watch in 2027
Budget Law 2027 (debated each autumn) could adjust any of these regimes — the 24-bis price has already moved twice in three years (€100,000→€200,000→€300,000), so do not assume today’s numbers are permanent. The 30,000-resident 7% expansion is fresh from April 2026, which usually means stability through 2027 — but watch the parliamentary debate each December. If you are planning a move, the election year usually matters: regimes apply to the tax year you transfer residence.
→ Best Bank Account for Pakistanis in Italy — October 2026 Guide
Moving to Italy? Set up the banking side free while you plan the tax side:
Open Wise Account → Open N26 Account → Open Revolut Account →