Lump-Sum: A Special Tax Residency Regime in Italy

27.06.2025

In 2017, Italy introduced a special residency regime under a lump-sum taxation system. Unlike the standard taxation system, which taxes individuals’ income based on a progressive scale (ranging from 23% to 43%), the lump-sum regime (Lump-Sum) involves the payment of a fixed annual tax amount.

This regime is particularly suited to those who derive the majority of their income from abroad and choose Italy as a comfortable place of residence.

Conditions for Applying the Lump-Sum Regime

To apply for this regime, the following requirements must be met:

A) The individual must not have been a tax resident of Italy for 9 out of the previous 10 years.

and

B) The individual must pay a fixed tax amount of €100,000 annually, regardless of the amount of income earned.

Note: The tax must be paid no later than 30 June of the year following the year in which the income was earned. For example, if the income is earned in 2025, the tax payment deadline is 30 June 2026 at the latest.

and

C) The individual must submit a special request (interpello) to the Tax Authority (Agenzia delle Entrate) before submitting the tax return for the tax period in which they are transferring their tax residency to Italy.

After receiving a positive response, the tax resident must notify the authorities using the “Option for the flat-tax regime for new residents” form (opzione per il regime di imposta sostitutiva).

and

D) The individual must become a tax resident of Italy in the year the request is submitted.

Note: An individual is considered a tax resident of Italy if they are physically present in Italy and:

• are registered in the Italian residents register (Anagrafe della popolazione residente), or
• have a domicile (domicilio) in Italy (i.e., the main centre of personal interests, such as family), or
• reside permanently in Italy.

Advantages of the Lump-Sum Regime

This regime applies only to income from foreign sources.

Note: Income from Italian sources is subject to the standard taxation regime (progressive scale), and such income must be declared.

This regime can also be applied by family members of the applicant (spouse, children, parents, parents-in-law, siblings). Additionally, a fixed tax rate of €25,000 per family member must be paid.

There is no need to declare foreign income.

• Exemption from tax on cryptocurrency holdings.
• Exemption from Italian gift and inheritance tax (for assets outside Italy), even if the previous owner was an Italian tax resident.

Duration of the Lump-Sum Regime

This regime can be applied for up to 15 years, after which the taxpayer must switch to the regular tax regimes of Italy.

Authors: Yaroslavna Zadesenskaya, Oksana Iashagyan

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