INDIVIDUAL FISCAL INCENTIVES

In 2019, the Italian Government has implemented a very extensive reform on preferential tax policies towards private subjects. 

An extremely favorable tax regime will be valid from 2020 for anyone who would move to Italy for at least 2 years, working mainly in Italy – more that 183 days a year - provided he or she has previously been a tax resident in a foreign country for more that 2 years. 

 

THE NEW FAVORABLE TAX REGIME PROVIDES FOR 

 

  • 70% tax base reduction – meaning taxes will be determined only on 30% of the earned income - for the first 5 years after the change of residence. 

 

Those 5 years can be extended to another 5 years with a 

  • 50% tax base reduction if the subject has become owner of a residential property or carries responsibilities for at least one underage or dependent child. 
  • 90% tax base reduction if the subject is responsible for at least 3 underage or dependent children. 

 

Furthermore, different tax base reductions are reserved for teachers and researchers, Specifically: 

 

  • 90% tax base reduction -  meaning taxes will be determined only on 10% of the earned income – for the first 6 years after the change of residence. 

 

The same tax base reduction can be extended to 

  • Additional 2 years if the subject has become owner of a residential property or carries responsibilities for at least one underage or dependent child. 
  • Additional 7 years if the subject is responsible for at least 3 underage or dependent children. 

Employment&Bonuses

Firms that employ workers under the age of 30 in 2021 are granted a reduction in the labor taxes for the first three years of their employment, up to a maximum of 3,000 euros per year. Several bonuses are also available for the hiring of people under 35, women, men and women over 50, workers/teachers/researchers residing abroad.

Startups

Italian startups under 5 years old with revenues of less than €5m receive an exemption from
certain taxes and access to flexible employee contracts. 30% tax relief for investors in innovative startups (Cap at €1m for individuals, €1.8 for companies).