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44 Int'l Tax J. 25 (2018)
Encouraging Experiences of Application for the Italian Lump-Sum Tax Regime

handle is hein.journals/intaxjo44 and id is 311 raw text is: 

in the law firm of McDermott Wilt &
Emery Studio Legate Associato, based
in its Mdian office and is the head of the
Italian Tax department.

LUCA ANGELINI is an Associate in the
taw firrn of McDermott Will & Emery
Studio Legale Associato, based in its
MPian office and is a member of the
italian Tax department.

Encouraging Experiences of

Application for the Italian

Lump-Sum Tax Regime

By Carlo Maria Paolella and Luca Angelini

1. The Italian Lump-Sum Tax Regime

1.1 Background
The Italian lump-sum tax regime (also referred to as resident non-domiciled tax
regime) has been enacted by the 2017 Budget Law (Law no. 232 of 2016, which
inserted new Article 24-bis in the Italian Tax Code) to benefit foreign individuals
who consider to move to Italy.
  More specifically, the regime at hand was introduced in year 2017 by the
Italian Government to attract the so-called foreign high net worth individuals
by providing them a significant incentive to move their tax residence to Italy.
The measure has, in fact, been intended to compete with other similar known
regimes already in place in other countries such as UK, Portugal and Switzerland.
  On March 8, 2017, the Italian Tax Authorities issued a Regulation to provide
some of the rules required for the full implementation of the lump-sum taxa-
tion, such as i) the rules to exercise, amend and revoke the related option and to
pay the lump-sum tax, ii) the conditions for the submission of a ruling request
concerning the regime and iii) the documentation to be provided in case a tax
ruling regarding the regime is filed. Moreover, on May 23, 2017, the Italian
Revenue Agency has also published a Circular Letter (no. 17 of 2017) in order
to address some of the main issues related to the new discipline at hand.

1.2 Main Features
The lump-sum tax regime comprises individuals who, regardless of their citizen-
ship, transfer their tax residence to Italy and, at the same time, have not been
residents for tax purposes in Italy during nine out of the 10 tax years preceding
the first year in which they start benefitting from the lump-sum taxation.' It is
an optional regime which can be enjoyed for a maximum of 15 years and can be
opted out at any time.
  As in most countries, also in Italy tax resident individuals are taxed on their
yearly worldwide income, while non-residents are taxed only on income which,
according to Italian tax rules, is considered as sourced in Italy.2 The regime, by



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