Courtesy of Von der Heyden Real Estate
ABBIADORI, ITALY - Have you wondered what life would be like to call one of the Mediterranean's most luxurious locations your home?
Today, there is even more incentive to do so. The Flat Tax in Sardinia, Italy is based on income produced abroad, applied to individuals who transfer their tax residence to Italy. It is established on a flat-rate basis, with a favourable fixed rate to encourage owners of large assets and income from foreign sources to move their tax residence to Italy.
How the Flat Tax Works
The Flat Tax can be defined as the substitute tax of the IRPEF one, on income produced abroad, applied to individuals who transfer their tax residence to Italy. It is established on a flat-rate basis, with a fixed rate, for each period of effectiveness of the scheme: for the single option it is € 100,000, while for family members, it is € 25,000.
The purpose of this tax model is to encourage the owners of large assets and income from foreign sources to move their tax residence to Italy.
The Subsidized Tax Regime
The Stability Law n. 232 of 2016, introduced a particularly facilitated tax regime, regulated by paragraph 152 of art. 1, which establishes that: "Individuals who transfer their residence to Italy pursuant to article 2, paragraph 2, may opt for the substitution tax, referred to in paragraph 2 of this article, of their income products abroad identified according to the criteria referred to in Article 165, paragraph 2, provided that they have not been fiscally resident in Italy, pursuant to Article 2, paragraph 2, for at least nine tax periods during the ten preceding the start of the option's validity period."
The clear objective underlying the law is to encourage investments, consumption and the rooting of families and individuals with high potential (income or assets) who want to establish themselves in Italy on a lasting basis.
You can access the option, if the following requirements are provided:
- Transfer of tax residence pursuant to Article 2, paragraph 2, of Presidential Decree no. 917/86;
- The beneficiaries of the option must not have resided in Italy for a time equal to nine tax periods during the ten preceding the beginning of the validity period of the option itself.