Euro 100.000 flat tax available to HNWI only without Anagrafe registration in the previous 9 years

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Article 24-bis of the Italian tax code (Tuir) allows individuals with large estates (so-called High Net Worth Individuals) who transfer their residence to Italy, to access the flat tax regime of 100,000 Euro, with an exemption from the tax monitoring obligations (FormRW) and from payment of IVIE / IVAFE (estate taxes on assets held outside of Italy), as well as an exemption from inheritance & gift tax.

A condition required in order to access the tax benefit is not having been resident in Italy pursuant to internal legislation in the last 9 fiscal years out of 10 (observation period).

This means that the registration in the Office of Records (Anagrafe) during the observation period effectively prevents the individual from having access to the tax benefit, with no chance to apply Double Taxation Agreements, as also confirmed by the Italian tax authority.

In this regard, an amendment of the tax law would be necessary in order to align the rights of all future New Residents to the ones granted already to impatriate workers. In fact, those impatriates who are still registered with Anagrafe and may demonstrate a tax residency abroad pursuant to the Double Tax Treaty (Article 4 ) can access the impatriate regime, whereas New Residents still need to apply the internal rule criteria, bearing a clear disadvantage in the eligibility.

This regime can be particularly beneficial to those managers working in the private equity sector, since they can be entitled to substantial bonuses deriving from carried interest payments.

For any further clarification, feel free to contact us.

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