Italy

Italy offers the new tax resident two structurally different regimes. For most EMET clients the primary track is the standard Italian regime, with foreign income properly calculated. Forfait €300k (regime dei neo-residenti) is a separate, lump-sum regime that is economically meaningful only for an Ultra HNWI subset. Both are described in turn.

Standard regime — the primary track for most clients

In the absence of forfait, the ordinary Italian tax system applies. The structure of foreign-source income for portfolio HNWI looks as follows:

• Foreign-source dividends and interest: 26% flat in standard cases (income from low-tax or “blacklisted” jurisdictions may be taxed at the full IRPEF progressive rate; DTT credits may be available for income subject to withholding at source)
• Foreign-source capital gains on portfolio investments: 26% flat (subject to the same caveats around anti-abuse and participation rules)
• IRPEF (Italian personal income tax) on employment and professional income: progressive 23-43%
• IVAFE on foreign financial assets: 0.20% per year on asset value
• IVIE on foreign real estate: 1.06% per year on asset value
• Quadro RW — mandatory annual declaration of all foreign assets
• Italian-source dividends and interest: 26% flat (with withholding at source)

For an EMET client with a typical configuration — a €5-20M portfolio at a Swiss private bank, dividend and interest income of €300-500k per year, plus possibly a limited capital gains realisation — the standard regime delivers a transparent and predictable tax burden. EMET's work consists of correctly structuring foreign income, using DTT mechanisms, coordinating with Swiss banks on withholding documentation, and analysing the existing ownership structure with IVAFE in mind.

This is the “ordinary” regime — but precisely in its proper setup and ongoing maintenance lies the principal technical value for our segment.

Forfait regime (currently €300k for new applicants as of 2026) — the Ultra HNWI track

Forfait is not a “reduced rate”; it is a lump-sum payment that replaces ordinary Italian taxation of foreign-source income with a fixed charge. For the client this means the choice is not simply “does the regime apply,” but a question of economics: whether the fixed payment is more rational than the standard regime over the life of the arrangement. The mechanics, breakeven and base risk are set out below; rates, duration and family additions are kept in the note alongside.

Evolution of the rate. The regime has been raised twice. As of 2026 there are three cohorts:

All three cohorts retain their rate for the remainder of the 15-year period — the 2024 and 2026 increases apply only to new applicants. The regime runs for up to 15 years.

What it covers. The flat tax covers foreign-source dividends, interest, capital gains, income from foreign holding structures, and foreign business income. Italian-source income (Italian real estate, Italian dividends, Italian employment or professional income) is taxed separately at standard rates.

Entry conditions. The individual must not have been an Italian tax resident in 9 of the 10 preceding years. The election is filed with Agenzia delle Entrate (the Italian tax authority); the regime activates from the year the individual obtains Italian tax residency.

Family additions. Each family member (spouse, children, parents) can be added on a fixed annual basis of €50k. A four-person family (principal plus three) — €450k per year in total.

Capital gains on qualifying participations. Capital gains on disposal of substantial holdings (>2% for public, >25% for private companies) realised in the first 5 years of the forfait period fall outside flat-tax coverage and are taxed under the standard rules. This requires separate timing analysis at the pre-relocation stage, particularly where the client plans to dispose of a Russian or other business in the early years of Italian residency.

Exemption from Quadro RW, IVAFE, IVIE. Forfait clients are exempt from the annual declaration of foreign assets and from the wealth-style taxes on their value, in respect of assets covered by the regime. This matters for clients with multi-layered international structures — it reduces administrative burden and narrows the scope of foreign-asset disclosure.

Forfait — economics: when it actually works

The principal difference between forfait and the standard regime is the fixed nature of the burden, independent of actual income. It is an instrument with symmetric upside and downside.

Upside: a client with €5M of annual foreign-source income and a client with €50M pay the same amount. The greater the income, the more efficient the regime.

Downside: a client with €0 foreign-source income in a bad market year still pays €300k. The regime is not “paused” in loss years; exiting before the 15-year term means losing the grandfathered rate.

Breakeven calculation — single resident, forfait €300k.

Income breakeven: €1,153,846 × 26% = €300,000
Below €1.15M of foreign-source income the standard regime is more advantageous. Above that level forfait starts to outperform.
With the wealth-style tax on foreign assets (IVAFE 0.20%) factored in, the threshold shifts downward to ~€1.0M of income.

Worked examples (taxable annual return 6%, illustrative):

Δ = Standard total − Forfait. Negative Δ — standard regime is cheaper; positive Δ — forfait wins.

* Calculation shown at an illustrative 6% yield, without accounting for DTT credits, asset type, ownership structure, anti-abuse rules, or additional taxes (e.g., IMU/TASI on Italian real estate). This is an illustrative model for understanding the economics of the regime — one of the abstract scenarios — not a final calculation for a specific client.

Breakeven calculation — family configuration (four persons), forfait €450k.

Income breakeven: €1,730,769 × 26% = €450,000
For family forfait the threshold sits higher — a larger income / portfolio is required to justify the €450k annual cost.

Worked examples (taxable annual return 6%):

Δ = Standard total − Forfait. Negative Δ — standard regime is cheaper; positive Δ — forfait wins.

* Same caveat: illustrative model at 6% yield, without DTT credits or individual specifics. The family calculation also excludes family members' own incomes.

Factors that shift the threshold down: a planned realisation event in the early years (sale of a business, exit from a position with a large embedded gain), inheritance shield over the 10-15 year horizon, privacy gain through Quadro RW exemption.

Factors that shift the threshold up: a significant share of Italian-source income (forfait does not cover this), active DTT credits available under the standard regime, a concentrated or volatile portfolio (see below).

All these factors are individual and require modelling against the actual structure of the specific client — the tables above provide initial orientation, not a final answer.

Forfait — the base risk of fixed cost

The forfait base risk is what is most often ignored at first analysis. The benefit of the regime is usually weighed against a 'normal' year with predictable dividend flow, and almost never against a bad-year scenario. For an EMET client this means the 'forfait or standard' decision cannot be taken on the breakeven calculation alone — a separate question must be answered: how does the regime behave when the portfolio draws down or coupons are paused. The bad-year scenario and the client profiles for which even a large portfolio does not make forfait automatically right are set out below.

Bad-year scenario (a 2022-style year: S&P -19%, growth sector -33%): a client with a €20M equity-heavy portfolio — value drops to €14-15M, dividend income may decline materially (particularly in concentrated growth, where payout has historically been low), no realised gains, coupons on private credit positions may be suspended.

• Standard regime: ~€0 of tax on foreign income + 0.20% × €14M IVAFE ≈ €28k
• Forfait regime: €300k (plus family additions, where applicable)

In such a year the delta amounts to €270k+ of additional cash outflow, compared with a standard-regime cost that, in that year, would have been minimal.

This risk is particularly material for clients with:

• concentrated equity portfolios
• private equity or venture exposure with volatile distributions
• private credit subject to default risk on coupons
• an active trading style with the possibility of an annual net loss

For such profiles, even a €30-40M portfolio does not make forfait an automatically correct choice. The standard regime offers more flexibility in these cases — tax accrues only when actual income exists.

Forfait in the European context — why the comparison with Beckham law is mistaken

In public guides and in common usage, forfait is often mistakenly compared with Spain's Beckham law or UK non-dom as an “Italian equivalent” to those regimes. The comparison is technically incorrect and regularly leads to the wrong client expectations — clients arriving in Italy expecting a “preferential rate” find themselves with a lump-sum payment whose economics work very differently.

The principal difference is as follows.

• Beckham law (Spain), UK non-dom, Cyprus non-dom are percentage-based regimes. They work as follows: a particular category of income is either fully exempted or taxed at a preferential fixed rate (for example, 24% Beckham on Spanish employment income up to €600k). The link to actual income is preserved and remains proportional — more income, more tax; less income, less tax. In a bad year, the tax is also small.
• Italian forfait is a fixed lump sum. The link to actual income is absent. €300k is paid regardless of whether the client earned €300k, €30M, or €0 in the year. It is not a “rate concession” — it is a lump-sum payment for the right not to compute foreign income at all.

These two constructions have different economics, different risks, and suit different client segments. Beckham and its analogues work for a wide range of HNWI — from €1M of annual income upward; forfait works only for Ultra HNWI with stable, large foreign-source income.

Where the comparison does retain meaning. All three types of regime (forfait, Beckham, non-dom) are special regimes for new residents that offer an alternative to the standard tax system. In that structural sense they sit in the same “special regimes for new residents” category. But the similarity ends there; each uses its own mechanism, and the choice between them turns not on “which regime is best” but on “which regime fits the specific client profile.”

For the typical HNWI configuration in EMET's practice — €5-20M portfolio, foreign-source income of €300-500k per year — Beckham law (where it was available), Cyprus non-dom, or the Italian standard regime with proper structuring is economically more advantageous than forfait. Forfait becomes justified only within the narrow Ultra HNWI segment with the right profile.

Impatriati regime

In parallel to forfait and the standard regime, Italy operates the impatriati regime — for working professionals returning to Italy with employment or professional income. The base exemption is 50% of income (with a possible increase to ~60% subject to additional conditions, for example the presence of minor children); duration 5 years with the possibility of extension. By logic, impatriati is closer to Spain's Beckham law: a percentage concession on the rate for active income. This regime is addressed to a segment distinct from forfait and is not, as a rule, engaged in EMET's practice.

The banking infrastructure of Russian-speaking HNWI in Italy follows the pattern visible in other European jurisdictions since the post-2018 de-risking wave.

Switzerland — for capital storage and management. Most of EMET's clients in Italy continue to hold investment portfolios at Swiss private banks (UBP, Edmond de Rothschild, Pictet, Lombard Odier, Julius Bär) — established infrastructure that the client has worked with for years and that is not typically rebuilt on relocation to Italy.

Italy — for operational and lifestyle needs. Italian banks (Intesa Sanpaolo Private Banking, UniCredit Private, Banca Generali, Banca Mediolanum) are used for Italian operational activity — payment for Italian real estate, day-to-day expenses, transparency to the Italian tax authority. For forfait clients, the Italian bank is often regarded as a “working account” rather than a place of capital storage.

EMET builds the link between these tiers, ensuring consistency of KYC, source of funds, and the client's tax position. This is a central part of the firm's work — Swiss and Italian banks must see a coordinated position based on the same documentation and the same logic, not different “versions” of the client depending on who answered.