DEROGATION FOR NEW RESIDENTS: SUBSTITUTE TAX FOR FOREIGN INCOME – STS | Studio Tributario Societario Internazionale

Article 24-bis of the TUIR provides for the possibility for taxpayers who transfer their tax residence to Italy to apply a flat-rate substitute tax of € 100,000 on income produced abroad in derogation of the principle of world taxation and the application of progressive Irpef rates. The new provisions apply starting from the income relating to the 2017 tax year.

The regime introduced by Article 24-bis of the TUIR is aimed exclusively at individuals and can be activated on an optional basis under specific conditions:

there is the transfer of tax residence to Italy pursuant to Article 2, paragraph 2, TUIR: considering the rationale of the legislation in question, aimed at attracting individuals with high potential due to the availability of significant capital and financial resources that can be invested in Italy, the use of the benefit implies the actual transfer of the natural person to Italy;
the natural person has not been fiscally resident in the territory of the State, pursuant to Article 2, paragraph 2, of the TUIR, for at least nine of the ten tax periods prior to the start of validity of the option: for this purpose, the nationality of the person who is moving has no relevance, as access to the scheme is allowed both to a foreign citizen and to an Italian citizen, provided that the prerequisite of fiscal residence abroad is integrated for the period indicated by the law. The facility also operates in the hypothesis of applicability of the presumption referred to in Article 2, paragraph 2-bis, of the TUIR (persons transferred to states or territories with privileged taxation).

The option can be revoked by the interested party at any time, and in any case ceases to have effect after fifteen years from the first tax period of validity (Article 24-bis, paragraph 4); the possibility of renewal of the scheme upon expiry is excluded (Revenue Agency circular n.17/2017, part III, paragraph 6).

At the request of the person exercising the option, the latter can be extended, throughout the period of the option, to one or more family members as provided by Article 433 of the Italian Civil Code, provided that physical. In this case, the substitute tax due must be increased by an amount equal to 25,000 euros for each tax period and for each family member.

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