Wealthy bankers, financiers and other high earners from London have been among those reshaping where they live and work in recent years, drawn by generous Italian tax incentives that advisers say can sharply boost take‑home pay. According to the original report, two separate sets of measures have been most talked about: a long‑standing “impatriates” regime aimed at attracting skilled workers back to or into Italy, and a newer optional flat‑tax for new residents that has been informally nicknamed “svuota Londra” (empty London). Both have been promoted by successive Italian governments as tools to stimulate investment and talent inflows.

The better‑known “return of the brains” or impatriates regime historically offered very large exclusions from taxable income for people who moved their tax residence to Italy. Official tax authority guidance shows that, under the pre‑2024 rules, eligible transferees could exclude significant portions of their Italian employment income from tax — typically 70 per cent excluded (30 per cent taxable) and, in designated southern regions and islands, a 90 per cent exclusion (10 per cent taxable). That earlier framework also included extension options for family members and certain buyers of Italian property, and—crucially—applied only to people who became Italian residents by 31 December 2023.

Legislation enacted at the end of 2023 substantially narrowed the impatriates concession for those arriving from 2024. The reformed regime, enacted by D.lgs. n. 209/2023 and summarised by tax authorities and advisers, generally includes only a 50 per cent inclusion rule (so half of eligible Italian employment income is taxable) for up to five years, and imposes an annual ceiling on eligible income (currently €600,000). New rules tightened residency and qualification tests — for example applicants must not have been resident in Italy in the three prior tax years and must commit to remain tax resident for set periods — and introduced stricter conditions on intra‑group transfers. Tax advisers have flagged important transitional arrangements for people who moved in 2023 and employer compliance implications arising from the reform.

There is some disagreement in public reporting about how many people have taken each route. Italian ministry figures cited in the lead report said roughly 50,000 people were signed up to the impatriates relief by 2023; by contrast, take‑up of the optional flat‑tax for new residents has been far smaller. Industry commentary and reporting offer different tallies: one analysis notes modest uptake with slightly over a thousand taxpayers recorded under the flat‑tax option in recent public updates, while other coverage has suggested several thousand applicants have shown interest since the scheme’s introduction and the subsequent increase in the flat charge to €200,000 for new entrants. Tax‑firm commentary explains why the flat option attracts high‑net‑worth individuals — predictable, capped taxes on foreign income and optional family coverage are major draws — but also stresses that the flat regime is tightly targeted by eligibility tests.

Individual experiences emphasise both the financial upside and the practical trade‑offs. Speaking to the Sunday Telegraph, a British national identified as Daria said she relocated from Hackney to Bari just before the 2024 rules change to take advantage of a 90 per cent exemption and described a marked improvement in lifestyle: “When travelling we met people who were optimising their finances.… we heard about the ‘impatriati’ scheme and realised it was a bit of a well‑kept secret,” she told the paper. By contrast, another former London banker, Francesca Inglima, told the same newspaper that although the tax incentive made relocation “a no‑brainer” initially, she returned to the UK after two years, citing bureaucracy and a desire to start her own business. These contrasting accounts underline that the tax benefit is only one element when people decide whether to relocate.

Practical consequences when the relief ends are material. Industry calculations used in the reporting show how someone on about €150,000 of gross pay could see annual tax liabilities leap when generous exemptions expire; the example given contrasts a low effective tax charge under the old relief with a significantly higher bill once the concession ends. The reformed rules also impose stricter residency‑and‑repayment conditions: beneficiaries must remain in Italy for minimum periods (failure to do so can trigger clawbacks), and certain high earners (above the stated ceiling) are ineligible. Official guidance and adviser notes list documentary requirements, qualifications and, for non‑EU nationals, EU Blue Card conditions now part of the eligibility mosaic.

Policy makers and commentators say the December 2023 changes were intended to curb perceived distortions and limit opportunities for abuse while still keeping Italy competitive for talent. Italian reporting and tax specialists describe the reform as an effort to preserve the objective of attracting highly skilled workers and investment while protecting public revenues; international tax firms have warned employers to update compliance processes and flagged that changes in the UK’s own tax rules have made Italy’s flat‑tax option relatively more attractive for some wealthy taxpayers. At the same time, advisers caution that the two regimes—impatriates relief and the flat‑tax for new residents—are different instruments with distinct eligibility criteria and long‑term implications for those considering a move.

For would‑be migrants, the picture is therefore mixed: the schemes can produce substantial, legally available tax savings and improved quality of life for some, but recent legislative tightening has reduced the scale and duration of the most generous concessions and increased administrative and residency commitments. Tax advisers and professional services firms recommend that anyone considering relocation to Italy should obtain early, specialist advice on the precise rules, transitional provisions (particularly if they moved in 2023) and the interplay with their home‑country tax obligations before making irreversible decisions.

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Source: Noah Wire Services