A New Location For Skilled Workers And Sports Stars (Continued)

Author:Mr Luca Ferrari and Giorgio Vaselli
Profession:Withers LLP

A new tax regime will allow qualifying workers (including sports stars and celebrities) relocating to Italy from 2020 to benefit from a substantially reduced taxation of selected incomes (from their professional activity and in some cases from sponsoring/endorsement activities) derived within the Italian territory

Italy has added to earlier incentives to attract skilled individuals to the country, issuing new rules aimed at attracting human capital to Italy (the “Decree”).

The new Decree substantially improves and expands some existing tax incentives for the relocation of workers to Italy (as well as researchers). Notably, these new measures not only make the current rules more appealing (in terms of tax savings) but, most importantly, they open the door for a real boost to the relocation of sports stars to Italy (the “Regime”).

Although the Regime applies to eligible individuals who become Italian tax residents as of 1 January 2020, interesting planning opportunities will also arise for those who relocate to Italy in the second half of 2019 (and may still keep their status as non-Italian tax residents until the end of 2019 and enjoy the relevant benefits in terms of taxation).

The Regime adds to a dramatically wide range of incentives already available to individuals relocating to Italy such as:

the tax regime applicable to high-net-worth individuals (subject to a substitutive tax of 100,000€ on their non-Italian sourced incomes), available since 2017; the tax regime applicable to pensioners/retirees (subject to a substitutive tax of 7% on their non-Italian sourced incomes), available since 2019; a former edition of the tax incentives for relocation of workers and researchers (subject to a reduced taxable base for individual income tax), available since 2010; one of the world's lowest inheritance and gift tax systems. The Regime

The Regime applies to workers and professionals who, as of 2020:

become an Italian tax resident (regardless of their foreign state of residence); commit to remain an Italian tax resident for the following two years; have not been an Italian tax resident in Italy for the past two years (the Regime also applies to Italian returnees); and work mainly within the Italian territory for either an Italian or a non-Italian enterprise, regardless of their role or qualification. Individuals who meet these criteria are subject to Italian individual income tax on only 30% of their employment / self-employment /...

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