Any experiences with the Italian inbound regime?

[xipoid]

Has anyone moved to Italy and taken advantage of the new(ish) inbound regime (lavoratori impatriati): Italy offers up to 90% tax relief to working expats willing to relocate

Basically you are taxed only on 10%/30% of your income (depending on whether you move to the south or north respectively) for 5 years, or 10 if you buy property/have a kid. Social insurance costs remain high, although there's a discussion to be had about whether that's less of a scam than in other places, given Italy's lifestyle and always-top-5 health service. It also works for Italians repatriating, if they've been absent for a sufficient length of time. The regime also applies if you work via your own limited company.

I'm well aware that there are options out there which enable you to hold onto more cash (in Europe, Cyprus for example). Still, there are advantages to Italy, and you arguably get a decent return for your social insurance (damn good health system).

I'm just curious if anyone has actual experience of this and what kind of servicing costs they've experienced -- running a company, accountancy, filing returns, etc.

 

[Martin Everson]

First time I heard about this and I need to see the detail. It does sound interesting to be able to live and work in Italy with a reduced tax burden.
However I would need to make sure its not a tax trap. I am also not sure how they would treat the different forms of income such as capital gains etc.

 

[kkein]

even 10% doesn't sound such a great deal, since you will have to most likely add up social security etc and it will boil down to a 30% to say the least.
And, beside, southern italy is likely worse than most other countries in EU. So why..?

 

[xipoid]

even 10% doesn't sound such a great deal, since you will have to most likely add up social security etc and it will boil down to a 30% to say the least.
And, beside, southern italy is likely worse than most other countries in EU. So why..?

It depends where in the south you choose. Define 'better'. One would typically choose Italy for lifestyle reasons; climate, food, beauty. You'll keep more of your money in Cyprus but it's 1/60 of the size, there's 1/60 of the people, and it offers a fraction of the variety. Sure, many more northern places will have better infrastructure if you don't mind being rained on all the time and eating crap.

However, I agree on the social security (although, again, you do get a healthcare system that is invariably in the world's top five, and that may be important depending on your stage of life).

 

[jackfrost]

the social security aspect would have to be calculated in detail. that can screw the whole thing properly.

also top5 health care is a FAR stretch. most people repartirate to their home countries in old age again because of the shitty hospitals in italy.

southern italy is indeed very much like cyprus, malta etc but if you grew up with the northern/central europe bulls**t you might actually appriciate that!

make sure you speak italian and be prepared to always be the foreign gringo no matter how long you stay, marry locally etc. not quite as nazi as the neanderthal french but close.

there is few places in the world where you can live like you can in italy.

“You may have the universe if I may have Italy.”

 

[kkein]

Afaik healthcare in italy is ok, nothing more. Also depends on where in italy.

 

[Martin Everson]

I too wonder now if anyone has had experience with this program

 

[JustAnotherNomad]

Don’t they also have lump sum program (100k tax)?
Anyway, I think I remember seeing some exclusions, such as capital gains from the sale of shares in a company in which you own more than X% or something...
The time constraint isn’t ideal either.

 

[Martin Everson]

Don’t they also have lump sum program (100k tax)?

Yes they do.

 

[jackfrost]

Interesting it also includes Sicily. The whole you need to mainly work with/in italy would have to be looked at closer. Of course also the limited time. Whats the tax rate after 5 years? For Sicily it reads like it would be 10% under that regime and with the new provisions only 5% for the first 5 years. 10% for living in (southern) Italy would be serious deal.

 

[Marzio]

Whoa there's a huge mistake in this thread.

You don't pay 10% on your income when moving your tax residence to southern Italy, you get 90% discount on the tax bracket that your income will fall into.

In Italy the highest tax bracket is 43% for income over 75K.

90% discount means that you only pay 4.3% for income over 75K.

This is only valid for 5 years.

To extend this regime you would need to buy a real estate there but you only get 50% discount this time meaning that you'll pay 21.5% for income over 75K.

Bottom line: move to Italy for 5 years, enjoy the sun, food and immigrants and then leave.

Here you'll find more info about this regime.

 

[jackfrost]

If you extend this with buying real estate how long does it get extended with 21.5%?

And is this only valid for employed / self-employed-sole-trader kind of setups or can you also do this with a limited kind of thing?

 

[Marzio]

If you extend this with buying real estate how long does it get extended with 21.5%?

5 more years

I really don't know if this is valid only for self-employed but i guess with an estonian company paying yourself tax free salaries could work.

 

[Martin Everson]

Here you'll find more info about this regime.

Thanks .

 

[jackfrost]

So 10 years approx 13% average tax. Not bad though for italy depending on what stage of your life your are in.

Well ok the social security thing would probably make it unattractive depending on how this is calculated.

 

[Martin Everson]

My concern is how bad are things in Italy economically that it is desperate to enact such a program...lol. I mean they are attracting people with that program at the lower end of the economic spectrum. Better they just lower the 100,000 non-dom program to 10,000 with requirement to have private medical insurance and be done.

 

[void]

wonder why everyone ignores social levies and mandatory health insurance - non-optional levies are simply another "hidden" component of the tax burden - well, one can object that mostly people pay health insurance somewhere after all but the rate really varies and expecting some retirement pension from a state before inevitable bankruptcy seem little foolish to me

anyone can summarize the real deal here? what a true "taxation" of let say 100k yearly income of a new Sicily resident will be?

 

[Martin Everson]

anyone can summarize the real deal here? what a true "taxation" of let say 100k yearly income of a new Sicily resident will be?

In Sicily?...sure,

30k to Cosa Nostra
30k to Black Axe
30k towards government taxes and social

Total post tax income 10k.

 

[karishi]

A friend of mine who was living in London used it recently, and it gave him a nice bump in income in the short term because it's baiscally almost zero tax on income, my understending is that you pay taxes on 30% of your income, so if you make 100k you pay taxes on 30k, so the lower bracket. Then you have INPS to pay. But he owns 4 houses in london, so the italian tax authority will f**k him really hard in the long term, if he starts a family in Italy, because once you have a family in Italy, you have to move the whole family to be considered as not tax resident in Italy.
So for an hit and run could be a good solution, if you plan to live two years in Sicily or in southern italy, and you need to have a tax certificate, prices for living are very low and places are beautiful.
But for the long term, stay away as much as possible from italy, because this is a tax trap, where they give you 10 years almost free and then they f**k you hard.
Health services are terrible in the south, terrible as I would never ever go to a public ER or doctor in the south, and good in the north, with usually abnormally long waiting times. I mean, lots of great doctors also works in the public sector, so you might be lucky and get a good one, but don't count too much on that.

 

[marioIT]

Forget Italy. Do no put tax residence there unless you are an Italian public "servant", so you're forced to...
if you want my view on the state of the country, I'll write a long post about it. Italian citizen here.
just go live in malta and use the cheap tax regimes there... when you're bored, take a 50mins flight to Sicily as much as you want. But don't fall for the Italian Govt Trap. Yes, you cannot trust Italian Govt, no matter it's right or left wing. They are greedy for your hard earned money.

Italy is beautiful. As a tourist.