Italy

Living in Italy, and being taxed by Italy

These are decided by different authorities, under different rules, on different clocks. The one people get wrong is the second.

The pension election and the investor visa let you live in Italy. Tax residency is decided separately, and generously, against the person who wants to avoid it: civil-law residence, domicile, or mere presence in Italy, any single one sustained for more than half the tax year is sufficient on its own, and a citizen who moves away without deregistering carefully can stay presumed resident regardless. Once you are a resident, Italy taxes your worldwide income, not just what you earn there.

The facts, each cited

• 7% southern pension regime

  Art. 24-ter of the income tax code lets a person receiving pension income from foreign payers, who transfers tax residence to a municipality in Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise or Puglia, or to a listed earthquake-affected municipality, in every case with a population not exceeding 30,000, elect a substitute tax of 7% on foreign-source income of any category. The option runs for the nine tax periods following the one in which it takes effect.

• Ceiling raised in 2026

  The population ceiling for a qualifying municipality was raised from 20,000 to 30,000 inhabitants, in force from 7 April 2026.

• Descent test, as amended

  Art. 3-bis of Law 91/1992, in force from 24 May 2025, treats a person born abroad who holds another citizenship as never having acquired Italian citizenship unless one of five exceptions applies. Three of them turn on a recognition application filed by 23:59 Rome time on 27 March 2025. The surviving ancestry exception requires a first- or second-degree ascendant who holds, or held at the time of death, exclusively Italian citizenship.

• Ten-year naturalisation stands

  The referendum of 8 and 9 June 2025 asked whether to halve from ten to five years the legal residence required of an adult non-EU foreign national applying for Italian citizenship. Of 45,997,941 electors, 14,071,701 voted, a turnout of 30.59%, below the quorum, so the ten-year requirement stands.

• Investor visa thresholds

  The investor visa requires at least EUR 2,000,000 in Italian government securities, EUR 500,000 in equity of a company established and operating in Italy, EUR 250,000 where that company is an innovative start-up, or a philanthropic donation of at least EUR 1,000,000 to a public-interest project. Securities and equity must be held for at least two years.

• Neo-residenti at EUR 300,000

  The neo-residenti option, which substitutes a single annual payment for tax on foreign income, was raised by the 2026 Budget Law to EUR 300,000 a year, and to EUR 50,000 for each family member to whom the option is extended. It applies to individuals transferring tax residence to Italy from 1 January 2026.

What an expert actually does, and when

Moving to Italy is four different jobs for four different people, and the order matters more than the choice of any one of them. Here is the sequence, what each person settles, and what to hold them to in writing.

1. First

   A cross-border tax adviser in the country you are leaving

   Before you sell anything, move your family, or claim to have left

   This is the one whose answer can make the rest of the plan pointless, so it is worth knowing before you spend anything on the rest. A residence permit somewhere else is not the same thing as having stopped being tax-resident where you are.

   What only they can settle

   • →Whether and when your tax residence at home actually ends
   • →Which ties (home, family, accounts, memberships, company control) have to be dealt with, and in what order
   • →What you owe on the way out, and what you can elect or defer
   • →Which transactions to complete before you go rather than after

   Ask for it in writing. A written residence and departure-date memo, with the tax on leaving set out asset by asset, and a list of the evidence your position depends on.

2. Second

   An immigration lawyer in the destination

   Six to twelve months before you intend to move

   Routes look interchangeable from outside and are not. Which one you qualify for depends on evidence you may not have gathered yet, and gathering it is often the long pole.

   What only they can settle

   • →Which route your actual income, work history, and assets satisfy
   • →Which authority handles each stage, and whether your entry status has to change first
   • →What proof each requirement takes, and what is missing today
   • →How a partner and children are included, and when

   Ask for it in writing. A route recommendation with the eligibility tested against your documents, plus a dated checklist of what is still missing.

3. Third

   Document authentication and translation

   Only after the lawyer has frozen the list

   Ordering apostilles and translations before the list is settled is the most common way to pay twice. Certified documents also expire, so starting early can be worse than starting late.

   What only they can settle

   • →Which authentication chain each document needs, in its issuing country
   • →What has to be translated, by whom, and to what standard
   • →The order to obtain things in, so nothing expires while waiting for something else

   Ask for it in writing. Authenticated originals and accepted translations, tracked so you know where every document physically is.

4. Fourth

   Local advisers where you land

   Once your status is approved

   Approval is not the same as a working life. Banking, health cover, and a tenancy each have their own requirements, and several of them want the paperwork from the earlier stages.

   What only they can settle

   • →What banking will require of you, and what to prepare before you ask
   • →Which health cover satisfies the local requirement
   • →What a lease commits you to, and what your obligations are on registering it
   • →What you now have to file locally, and when

   Ask for it in writing. A working household: identity documents, an address, cover, banking, and a calendar of what renews when.

OmniFlag is not a law firm or a tax adviser. Experts are retained independently and their engagement letter defines what they advise on, what they file, and what they deliver.

What nobody puts on the Italy brochure

• Citizenship by descent closed on 27 March 2025, and most of what you will read about it is out of date. A person born abroad who holds another citizenship is now treated as never having been Italian unless a narrow exception applies. The surviving ancestry test is not the widely repeated parent-or-grandparent-born-in-Italy rule, which comes from superseded draft text: the law requires a first- or second-degree ascendant who holds, or held at death, exclusively Italian citizenship.

• Naturalisation still takes ten years for a non-EU national. A referendum on 8 and 9 June 2025 asked whether to halve it to five; the proposal drew 65% support but only 30.59% of the electorate voted, short of the quorum, so nothing changed.

• The headline flat tax is not for a mid-tier earner. The neo-residenti regime, which shelters foreign income behind a single annual payment, now costs EUR 300,000 a year plus EUR 50,000 for each family member added, for anyone moving tax residence from 1 January 2026. It was EUR 100,000 as recently as 2024.

• The 7% regime is narrow by design. It requires a pension paid from abroad and a move to a qualifying town of up to 30,000 people in one of eight southern regions or a listed earthquake-affected municipality. It does not apply if you settle in a large city, and it runs for the option year plus nine, not indefinitely.

Common questions

How does the 7% pension regime actually work?

You must receive a pension paid by a foreign payer and move your tax residence to a qualifying municipality of no more than 30,000 people, in one of eight southern regions or a listed earthquake-affected town. All your foreign-source income, of any category, is then taxed at a flat 7% for the year you take the option and the nine that follow.

My great-grandfather was Italian. Can I still claim citizenship?

Almost certainly not, and be careful what you read. Since 24 May 2025 a person born abroad holding another citizenship is treated as never having been Italian unless a narrow exception applies. The surviving ancestry exception is not the parent-or-grandparent-born-in-Italy rule you will see repeated online, which comes from superseded draft text; the law requires a first- or second-degree ascendant who holds, or held at death, exclusively Italian citizenship.

Is Italy a good tax move if I am a high earner rather than a retiree?

Generally no, on the headline regime. The neo-residenti flat tax that shelters foreign income now costs EUR 300,000 a year, plus EUR 50,000 per family member, for anyone moving from 1 January 2026. That is a rate for very large fortunes. The 7% regime is the one that works at ordinary money, and it needs a foreign pension.