Under the updated regulations governing the flat tax regime for new residents in Italy, the legislator has introduced a specific safeguard clause. According to the new rule, the increase in the substitute tax will apply only to individuals who transfer their civil residence to Italy (Art. 43 Civil Code) starting from 1 January 2026, the date on which the Stability Law comes into force.

This means that anyone who establishes their habitual residence in Italy by 31 December 2025 will continue to benefit from the current preferential regime, which provides for:
— a fixed tax of €200,000 for the main taxpayer;
— €25,000 for each family member included in the regime.

Conversely, individuals who acquire civil residence from 2026 onwards will be subject to the new, higher thresholdsintroduced by the legislation.

How the Preferential Flat Tax Regime for New Residents Works

The tax regime set out in Article 24-bis of the Italian Income Tax Code (TUIR), introduced by the 2017 Budget Law, allows individuals who transfer their tax residence to Italy to replace IRPEF on foreign-source income with a fixed annual tax of €200,000, regardless of the amount of income earned abroad.

Income generated in Italy, however, remains subject to standard taxation and does not fall under the flat tax regime.

To access the flat tax for new residents, the taxpayer must:

• establish tax residence in Italy;
• not have been tax resident in Italy for at least 9 of the 10 tax periods preceding the application of the regime.

The regime may be applied for up to 15 years and can be extended to family members listed in Article 433 of the Civil Code (such as spouse, children, parents, brothers, and sisters), each of whom benefits from a reduced fixed tax of €25,000 per year.