Italy is to hike its flat tax on the overseas income of rich persons who relocate to the nation by 50%, to €300,000, reports The Financial Times. If passed by parliament, the increase would deal a significant blow to wealthy foreigners looking to avoid higher taxes elsewhere in Europe.
According to The Financial Times, under present laws, a new foreign resident, or a returning Italian who has lived abroad for at least nine years, can pay a flat tax of €200,000 per year on any overseas income and assets for up to 15 years while being completely exempt from inheritance tax on foreign assets during that time.
Other countries that have seen an increase in interest from wealthy expats include the United Arab Emirates, which does not impose personal taxes on citizens.
According to a finance ministry official, the provision has been included in Italy’s draft 2026 budget law, which will decrease taxes for both low- and middle-income people.
If passed by parliament, this will be the second time the Meloni government has raised the flat tax. Last year, the amount was increased to €200,000 for new immigrants.
Earlier in May, Italy modified the rules for attaining Italian citizenship, impacting millions claiming ancestral citizenship. Italy’s citizenship rules for the descendants of overseas emigrants have effectively been tightened.
Earlier, a great-grandparent or great-great-grandparent was enough to get an Italian citizenship. Now, Giorgia Meloni’s right-wing government has restricted the eligibility criteria to children and grandchildren of Italian nationals.
Previously, everyone with an Italian ancestor who lived after March 17, 1861, when the Kingdom of Italy was established, qualified for citizenship.
The new Italian citizenship rules, which entered into force in March, were codified into law on Tuesday, May 20, 2025.
According to the Henley Passport Index, Italy ranks third in the world for visa-free or visa-on-arrival travel, making it one of the most sought-after and, up until now, easiest to obtain passports.