Italy doubles flat tax for super-rich expats

MILAN: Italy’s government said on Wednesday it would double a flat tax on foreign income for high earners newly moved from abroad, from 100,000 euros ($110,000) to 200,000 euros a year.

The original rate, levied for a maximum of 15 years in lieu of other taxes, was introduced in 2017 in a bid to lure wealthy people from overseas, including Italians who had been tax resident elsewhere for many years.

Prime Minister Giorgia Meloni’s government approved “a regulation that has made a lot of noise -- the doubling of the so-called flat tax for billionaires”, Economy Minister Giancarlo Giorgetti said after a cabinet meeting.

He said 1,186 super-rich individuals had transferred their residency for tax purposes to Italy since 2017, but said it was “very difficult to evaluate” how much they had invested in Italy.

Giorgetti said the new rate -- which a ministry spokesperson confirmed would only apply to new arrivals -- was still attractive but said it was important that countries did not seek to compete to offer the lowest rates for high-worth individuals and companies.

“We are against starting a competition because countries like Italy, which have very limited fiscal space, are destined to lose,” he told a press conference. Giorgetti recalled ongoing global discussions about how to make the super-rich pay more taxes, a topic which dominated a meeting of G20 finance ministers in Rio de Janeiro last month.