Italy's Regime Impatriati is one of Europe's most generous tax incentives for attracting skilled workers. It allows individuals who transfer their tax residence to Italy to exempt 70% (or even 90%) of their income from taxation. If you are considering a move to Italy, this regime could save you tens of thousands of euros per year.
How the Regime Works
Under the Impatriati regime, only a fraction of your income is subject to IRPEF:
- Standard benefit: 70% of income is exempt — you are taxed on only 30%
- Southern Italy benefit: 90% of income is exempt — you are taxed on only 10%
- The "South" includes Abruzzo, Molise, Campania, Puglia, Basilicata, Calabria, Sardinia, and Sicily
For example, with an €80,000 salary and the standard 70% exemption, only €24,000 is subject to IRPEF. At the 23% rate for the first bracket, your IRPEF would be approximately €5,520 instead of the normal €22,000+ — a saving of over €16,000 per year.
Eligibility Requirements
To qualify for the Impatriati regime, you must:
- Not have been an Italian tax resident for at least 2 tax years before the transfer (3 years if you were previously employed by the same entity or group)
- Transfer your tax residence to Italy under Article 2 of the TUIR (present in Italy for more than 183 days per year)
- Commit to maintaining Italian tax residence for at least 2 years — if you leave before this period, benefits must be repaid with interest
- Work predominantly in Italy — the activity generating the incentivized income must be performed mainly in Italian territory
Duration and Extension
The standard duration of the benefit is 5 tax years. It can be extended for an additional 5 years at a reduced benefit level if you meet one of these conditions:
- You have at least one dependent minor child
- You purchase residential property in Italy (before, during, or within 12 months of moving)
During the extension period, the exemption drops to 50% (taxed on 50% of income) or remains at 90% for Southern Italy with qualifying conditions.
Types of Income Covered
The regime applies to:
- Employment income (redditi di lavoro dipendente)
- Self-employment income (redditi di lavoro autonomo)
- Business income (redditi d'impresa) for individual entrepreneurs who transfer their business to Italy
Investment income (capital gains, dividends, interest) is NOT covered by the Impatriati regime and is taxed normally.
How to Apply
The application process depends on your employment type:
- Employees: Submit a written request to your employer, who will apply the reduced withholding from your busta paga. Include a self-certification (autocertificazione) of your eligibility.
- Self-employed: Apply the benefit directly when filing your annual tax return (Modello Redditi PF), reporting only the taxable portion of income.
Recent Changes (2024)
The 2024 Budget Law introduced some modifications to the regime for new applicants:
- The exemption rate has been adjusted for new entrants — check the current legislation for the most up-to-date rates
- Income caps may apply to the maximum benefit
- Enhanced benefits may still be available for workers with dependent children or those purchasing property
Use our Italy Impatriati regime calculator to estimate your tax savings under this scheme.