Our latest article for national relevance press about the special tax regime for New Residents

Our latest article has been published in the most important Italian financial newspaper, 'Il Sole 24 Ore', on 31 May 2023. It is commenting on the reply to a recent ruling application submitted by our firm to the Inland Revenue Agency and edited by Mr Paolo Malagoli (our name partner), in a team with Mr Francesco Baccaglini (lawyer), for an important foreign client of ours.

Click here to read the article (only in Italian).

The Revenue Agency's reply clarified, albeit with no particular legal depth, some interesting application aspects of the special tax regime optionally reserved for those who transfer their residence to Italy and decide to pay a lump sum substitute tax of 100,000 euro on foreign-source incomes (Article 24-bis of Italian income tax law - shortly IITL).

We do not want to go over the features of the Italian 'Res-non-dom' tax regime and its peculiarities, You can read our old but updated post about it (by clicking here). We want only to summarise below the exciting interpretations of the Italian Revenue Agency in this regard:

1. From the Italian point of view, the tax regime for new residents in Italy provided for by Article 24 bis of the IITL allows the application of the convention against double taxation (DTC) between Italy and Switzerland only if the Swiss country is excluded from the list of countries covered by the substitute tax. In other words, only with the opt-out of Switzerland from the substitute tax regime, the Italian New Resident will be able to invoke the application of the benefits of the DTC for what concerns, for example, the reduced withholding taxes on dividends paid from Switzerland to Italy or the applicability of the Tie Break rules to define the residence of natural persons.
2. The special tax regime envisaged for residents in Campione d'Italia town is compatible with the Special Tax Regime for New Italian Residents under Article 24 Bis of the Tuir. The former, in fact, is not among those listed in Revenue Agency Circular No. 17 of 2017 as incompatible and, moreover, it is a 'natural' regime and not an 'optional' one like the latter.
3. It is possible to disapply the rule that provides for the ordinary taxability (and not with the 24 bis substitute tax of 100,000 euro) of capital gains on sales of qualified shareholdings made in the first 5 years of the option for the tax regime of New Residents. The New Resident will, however, have to commit to remain resident in Italy for a further 5 years.

Our professional firm offers specialised tax advice to individuals who wish to relocate their residence to Italy also taking advantage of the favourable tax package provided for New Residents by Article 24 bis of the IITL. We cooperate with their foreign tax advisors, take care of the ruling application ('interpello') to the Inland Revenue Agency and support the whole relocation phase up to the ordinary annual tax consultancy and the related tax services (tax return declaration and tax payments). We have a lot of experience with the special tax legislation for 'resident not domiciled' (new residents) since its first introduction in our legal system and many clients for whom we have already successfully handled the option for this special tax regime. Contact us with confidence to discuss your case, in complete confidentiality.

We will also find the best solution for you.