Why Italy’s Flat Tax Regime Is Now the Most Attractive in Europe

Italy has positioned itself as one of the most appealing destinations in Europe for high-net-worth individuals looking for a favorable tax structure, legal stability and an elevated lifestyle. The Italian Flat Tax Regime was created to attract international wealth, entrepreneurs and investors by replacing the traditional progressive taxation system with a model based on certainty, privacy and long-term planning. It allows eligible individuals to pay a fixed amount on foreign income while enjoying full residency in one of the most strategically located and culturally rich countries in the EU.

A Fixed €200,000 Tax on Foreign Income

The most distinctive element of the Italian Flat Tax is its predictability. Regardless of the amount of income generated abroad, the annual tax remains €200,000. The regime can also be extended to family members by paying an additional €25,000 per person. This structure is particularly attractive to entrepreneurs, executives, investors and family offices who derive substantial income outside Italy but want a stable European residency without the burden of progressive tax rates.

Exemption on Foreign Assets, Income and Capital Gains

Another decisive advantage is the exemption from declaring or being taxed on foreign assets. Income from real estate abroad, capital gains from foreign investments, dividends, royalties and distributions from trusts are all covered by the substitute tax. There is no requirement to report overseas bank accounts or properties, and no wealth tax applies. This creates a level of confidentiality and simplicity that very few jurisdictions currently offer.

No Wealth Tax or Global Reporting Duties

Italy does not impose a wealth tax, and those under the Flat Tax Regime are not required to report their worldwide assets. Countries like Spain or France still tax global wealth, while others have tightened their regimes, creating uncertainty for individuals with complex asset structures. In contrast, Italy provides a clear and protective legal framework, making it an appealing jurisdiction for long-term asset planning and succession strategies.

Tailored to Global Entrepreneurs and International Families

This regime is well-suited to individuals with significant international interests—whether they manage companies across borders, hold investments in multiple jurisdictions or receive income from trusts and holding structures. It is also an attractive solution for those relocating from high-tax countries who want a long-term plan for themselves and their families. The regime can last up to fifteen years and there are no penalties in the event of an early exit, providing flexibility for those who value mobility.

Strong Alternative to Other European Regimes

Several countries that once attracted wealthy residents—such as Portugal, Spain and the UK—have restricted or weakened their special regimes. Italy has instead strengthened its position and now represents one of the most competitive options in Europe. Compared to other jurisdictions, it combines stability, lifestyle, legal certainty and international recognition, making it a realistic alternative to long-standing non-dom or special resident programs.

Lifestyle, Security and Strategic Location

Choosing Italy under this regime is not only a fiscal decision. Cities such as Milan, Florence, Rome, Turin and the Lake Como area offer international schools, high-end real estate opportunities, excellent healthcare and easy access to major European hubs. The combination of lifestyle, climate, culture and connectivity makes Italy particularly attractive to families and individuals used to a certain standard of living.

Ready to Relocate Under the Flat Tax Regime?

We provide discreet and comprehensive support to individuals and families interested in relocating to Italy under the Flat Tax system. From tax and legal structuring to residence permits, property search and family assistance, every aspect can be managed with a single point of contact.

📩 Email: info@knotted.ch

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