The year 2026 represents the final opportunity to elect the €100,000 substitute tax regime available to individuals qualifying under the Italian New Residents regime.
This applies to individuals who transferred their tax residence to Italy at the beginning of 2024 and intend to opt for the €100,000 flat tax (the substitute tax regime applicable to high-net-worth individuals), as well as the additional €25,000 substitute tax applicable to each qualifying family member.
The election must be made in the 2026 Italian income tax return (Modello Redditi 2026) relating to the 2025 tax year, provided that the regime was not already applied for the 2024 tax year (for instance, due to a temporary lack of economic convenience).
After 2026, it will no longer be possible to exercise the option. Indeed, individuals who relocated to Italy in 2024 will have accrued two full years of Italian tax residence, thereby exceeding the statutory time limit for accessing the regime.
As a reminder, eligibility for the regime requires that the individual has not been tax resident in Italy for at least nine out of the ten tax years preceding the first year of validity of the election (see our previous analysis here: https://www.studiobcz.it/flat-tax-a-200-000-euro-per-i-nuovi-residenti/).
Payment of the substitute tax must be made annually by 30 June of the year in which the election is exercised. The regime provides for:
- Exemption from Italian taxation on foreign-source income;
- Exemption from foreign asset reporting obligations (Form RW);
- Exemption from IVIE (Italian wealth tax on foreign real estate);
- Exemption from IVAFE (Italian wealth tax on foreign financial assets);
- Exemption from Italian inheritance and gift tax on assets located abroad.
Failure to exercise the option in 2026 with respect to the 2025 tax year will require the individual to file an ordinary Italian income tax return on an analytical basis, completing the relevant sections (e.g., Section RM for foreign dividends, Section RT for financial capital gains, Section RW for foreign investments and foreign financial/real estate assets), including payment of IVIE and IVAFE where applicable.
Where an advance tax ruling (interpello) is intended to be filed with the Italian Revenue Agency, the process should be initiated promptly, as the statutory response period is 120 days (subject to potential requests for supplementary documentation).
2026 is therefore the final year to elect the €100,000 flat tax regime for New Residents. Our Firm has extensive experience in assisting high-net-worth individuals with the structuring and implementation of this regime and remains available to assess the feasibility of filing an advance ruling application in the coming days.
For further information, please contact us.
