TL;DR — Key Takeaways
- →Impatriati: 50% income tax exemption on Italian-source employment income for 5 years (extendable to 10).
- →Extension to 10 years: buy a property in Italy OR have a child who becomes Italian resident.
- →Condition: must not have been Italian tax resident for 3 consecutive years before moving.
- →Must commit to Italian tax residency for at least 2 years or exemption is clawed back.
- →At €150k gross: standard effective rate ~36%; Impatriati rate ~18% — saving roughly €27k/year.
Italy's Impatriati Regime (Regime Degli Impatriati, or "inbound workers regime") is one of Europe's most generous income tax incentives for new residents: 50% of Italian-source employment and self-employment income is excluded from taxable income for 5 years, extendable to 10.
At a €150,000 gross salary, only €75,000 is taxable. Your Italian income tax drops from approximately €53,000 (standard) to approximately €25,000 under the regime — a saving of roughly €28,000/year.
How the 50% Exemption Works
The exemption applies to income from:
- Employment with an Italian employer
- Self-employment (freelance, professional income) in Italy
- Business income if registered in Italy
50% of that income is excluded from the income tax base. The remaining 50% is taxed at standard Italian progressive rates (23%–43%) plus regional surtaxes (~1.2%–3.3%).
Example: €150,000 Salary
Standard Italy: taxable income = €150,000; income tax ≈ €53,000 (≈ 35% effective). Impatriati: taxable income = €75,000; income tax ≈ €23,000 (≈ 15% effective after exemption). Annual saving: ~€30,000.
Over 5 years: €150,000 saved; over 10 years: €300,000 saved.
Who Qualifies?
- 1You must not have been an Italian tax resident for at least 3 consecutive years before the year you move to Italy.
- 2You must commit to Italian tax residency for at least 2 years after the move (or the exemption is clawed back).
- 3You must work primarily in Italy (must perform the majority of your work activity in Italy for the qualifying period).
Extending to 10 Years
The standard term is 5 years. You can extend for an additional 5 years (total 10 years) if you meet one of:
- Purchase a residential property in Italy before or during the first application year.
- Have at least one minor child who becomes Italian tax resident (or was born in Italy).
Extension rate for the second 5 years: 50% exemption continues if you have one qualifying condition; it has historically been extended at the same rate though policy should be verified annually.
HNWI Flat Tax Alternative
Italy also offers a separate regime for very wealthy new residents: a flat substitutive tax of €200,000/year on all foreign-source income, regardless of amount, for up to 15 years. This is distinct from the Impatriati regime and cannot be combined with it. At very high income levels (foreign income generating >€200k tax at standard rates), the HNWI flat tax wins.
Practical Steps
- 1Establish Italian tax residency (register with a municipio, obtain a codice fiscale, and spend 183+ days in Italy).
- 2File the Impatriati election (opzione regime impatriati) in your first Italian tax return (Modello 730 or Redditi PF) for the year of transfer.
- 3The exemption is automatic once elected — no advance approval required.
Source: Agenzia delle Entrate (agenziaentrate.gov.it); Italian Income Tax Code (TUIR) Art. 16; Circular 33/E/2020; OECD 2026.