Italy will be asking rich people who move their tax residence to the country to pay more in the future. The government in Rome today approved a measure that will double the “flat rate tax” on income earned by rich people abroad to 200,000 euros per year.
The incentive, introduced in 2017 under a centre-left government, was intended to attract rich people to Italy in the hope that it would benefit the economy.
Economy Minister Giancarlo Giorgetti said Italy was now against the idea of countries competing with each other to offer “tax breaks” to the wealthy. “A country like Italy, which has limited fiscal space, can only lose such competition,” he said.
New rules only for future registrations
The doubling of the flat-rate tax should only apply to people who register for the option in the future, the decree said. Those who have already moved their tax residence to Italy would be spared.
The Italian Court of Auditors estimates that taxes paid under the scheme amounted to €254 million between 2018 and 2022. A prominent beneficiary of the scheme was Portuguese football star Cristiano Ronaldo, who moved his tax residence to Italy between 2018 and 2021 while playing for Juventus.
