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What is the tax treatment if I choose not to take advantage of Italy’s flat tax system designed for RBI investors?

When doing my research on the investment immigration program of Italy, I learned that its flat tax rate is designed to reduce the annual tax liability of RBI investors to 100,000 euros. However, if I choose not to be enrolled in this system, what is the tax treatment for my Italian and foreign income?

  • Avv. Andrea Parisi
    March 23, 2019

    If you choose not to take advantage of Italy’s flat tax system designed for RBI investors, then the tax treatment will follow general rules according to Italian tax system. Therefore, the tax treatment for your Italian and foreign income will be calculated on the basis of income tax rates valid for any Italian citizen. Hence, as for 2019, you will have to consider five rates, from 23 percent to 43 percent, valid from incomes from 15,000 euros to 75,000 euros or more. Obviously, you will be allowed to deduct any expenses before calculting how much you have to exactly pay and consider also that you would be able to opt for a flat tax if you are entitled.

  • LCA Studio Legale
    March 25, 2019

    If you decide not to apply for the flat tax regime for the payment of a substitutive tax of 100,000 euros on all income, no matter where generated, you would be subject to ordinary Italian taxation. The tax is direct, progressive and its amount - calculated on the basis of a tax bracket system - depends on the actual amount of income generated by the person.