Trust Bloomberg Tax for the international news and analysis to navigate the complex tax treaty networks and global business regulations.
Italy unveiled a plan to allow the ultra-wealthy willing to take up residency in the country to pay an annual “flat tax” of 100,000 euros ($105,000) regardless of their level of income.
A former Italian tax official told Bloomberg BNA the initiative is an attempt to entice high-net-worth individuals based in the U.K. to set up residency in Italy as a way to remain in the European Union after the terms of Brexit become effective.
According to the March 8 plan, qualifying individuals from any country are eligible to take advantage of the law, although the impact on the individual’s tax obligation in their home country would depend on that country’s tax laws.
“The idea is that it will help raise revenue through the taxes collected from these individuals as well as from their economic activities: workers they may hire, property sales, and so on,” Francesco Brandi, a former Italian tax official now a professor with Rome’s Sapienza University, told Bloomberg BNA in a March 9 telephone interview.
The rule applies only to individuals who have been a resident in Italy for a maximum of one of the last 10 years, and it expires after 15 years of residency. Individuals paying the flat tax can add family members for an additional 25,000 euros ($26,250) each.
The local media speculated that the measure would attract at least 1,000 high-income individuals, a number which—if accurate—would add an additional 100 million euros ($105 million) to state coffers.
But the measure may not be a done deal. According to Carlo Garbarino, a tax law professor at Bocconi University in Milan, the plan is fraught with problems.
“It may be declared unconstitutional because tax laws are required to be equitable,” Garbarino told Bloomberg BNA March 9 in a telephone interview. “If, say, a Russian oligarch with 10 million euros ($10.5 million) in income relocates to Italy, he will basically pay 1 percent in income tax. Is that equitable?”
To contact the reporter on this story: Eric J. Lyman in Rome at email@example.com
To contact the editor responsible for this story: Penny Sukhraj at firstname.lastname@example.org
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)