If you're a person of working age who's considering moving to Italy, you may want to look into its lavoratori impatriati or 'inbound workers' tax regime.
The scheme, which was introduced in 2015, provides significant tax breaks for highly-qualified workers who relocate to Italy after being out of the country for at least three consecutive tax years.
It was watered down in 2024 but still offers some fairly substantial savings for those who qualify under the new rules.
The regime primarily targets Italians who've gone abroad for work, which is why it's alternatively known as the Regime per il Rientro dei Cervelli or 'Reverse Brain Drain' scheme.
But there's nothing stopping foreign nationals with the right to work in Italy from taking advantage of it.
According to Italy's Revenue Agency, the scheme currently offers the following benefits:
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- You get a 50 percent tax break for the first five years of living in Italy, capped at an annual income of €600,000.
- You get a 60 percent tax break if you move with a dependant under the age of 18. If you have or adopt a child after starting on the regime, you benefit from the 60 percent tax break from the moment of birth/adoption up until the end of the original five-year period.
Bear in mind that these tax incentives only apply to income derived from employment (including self-employment), and not other sources, such as rent or capital gains.
To qualify under the current rules, you should not have been resident in Italy for at least the previous three tax years, and must commit to moving your tax residency to Italy for at least four years.
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If you move away from Italy before the four years are up, you'll be required to repay the savings with interest.
The length of time beneficiaries must have lived outside of Italy increases to six tax years for those continuing to work for the same group of companies after moving to Italy, and seven if the worker previously worked for that same group in Italy.
Italian citizens are considered to have been resident abroad if they were registered with AIRE (Anagrafe Italiani Residenti all'Estero) or were resident in a country with which Italy has a double taxation agreement.
While there were previously no restrictions around a beneficiary's level of education or qualifications, as of 2024, they must meet the definition of 'highly qualified' under Italian law.
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That means having a three-year degree that is recognised by Italy, and a professional qualification that falls within Level 1, 2 or 3 of the Italian Institute of Statistics’ official jobs classification.
To claim the benefit, employees should make a written request to their employer showing that they meet the requirements; the discounted tax rate will then be applied to monthly salary instalments going forward.
If you file the request after the tax year has already started, you can ask Italy's revenue agency to reimburse you for the months for which the discount was not applied when you submit your annual tax return.
Self-employed people can claim the benefit when they file their tax return.
If you were planning a move to Italy and qualify under the new rules, taking advantage of the regime seems like a no-brainer.
As things stand, however, the benefits may not be enough to actively incentivise people to relocate; this is particularly true for self-employed workers, whose incomes are subject to steep social security payments before tax.
It's also important to bear in mind that the regime is only available to people who already have the right to live and work in Italy - that is, EU citizens or people with visas that allow the holder to work.
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