On December 30th, 2025, Italy approved its Budget Law for 2026, introducing significant changes to the special tax regime for new tax residents. These changes took effect starting January 1st, 2026 and are confirmed in the official publication of the Budget Law in the Gazzetta Ufficiale.
Revised regime for new tax residents
Italy’s special tax regime, often called a flat tax, allows individuals who were not tax residents in Italy for at least 9 of the previous 10 years to pay a fixed annual substitute tax on foreign-sourced income instead of being taxed under the ordinary progressive system.
The regime is available for up to 15 years. It may be extended to certain family members, provided they pay separate flat tax payments.
The updated €300,000 lump sum applies only to individuals who become Italian tax residents after the new law takes effect. Those who already relocated and opted into the flat tax regime before January 1st, 2026, will continue to benefit from the previous fixed tax rates, with no retrospective changes.
Fiscal impact and profile of beneficiaries
Despite the increase to €300,000, the flat tax remains an attractive option for individuals and families with substantial foreign-sourced income. For high-income earners, particularly those with annual foreign income of €1 to 1.5 million or more, the fixed levy can still result in a lower overall tax burden than progressive tax rates in many European jurisdictions.
The higher threshold for family members also reflects the broader recalibration of the regime, aligning fiscal contributions more closely with the profile of ultra-high-net-worth households that the measure is designed to attract.
Italy Golden Visa and tax residency
The changes are particularly relevant for applicants considering the Italy Golden Visa. The current investment options include:
-
€2 million in Italian government bonds;
-
€1 million as a philanthropic donation to a public-interest project;
-
€500,000 in shares of an Italian company;
-
€250,000 in an innovative Italian startup.
The residence permit is issued for two years, with subsequent renewals for three years, and may include immediate family members.
Obtaining an Italy Golden Visa does not automatically make an applicant a tax resident of Italy. Tax residency depends on physical presence in the country, registration with the Italian population register, and the centre of vital interests.
As a result, investors may hold an Italian residence permit while remaining tax residents of another country until the relevant thresholds are met.
