New tax ruling boosts Italy’s appeal for individuals relocating to Italy

Over the past couple decades the Italian legislator enacted a number of measures aimed at attracting the relocation to Italy of highly qualified workers and, more recently, of high-net-worth individuals.

The measures currently in force provide for two different and separate beneficial tax regimes according to which:

• Italian-source employment or self-employment income (within a €600,000 per year cap) earned by individuals who transfer their tax residence to Italy benefit from a 50% reduction of their income taxes, for a 5 year term starting from the year of their relocation to Italy provided that the relevant workers: (i) transferred their tax residence to Italy after 1 January 2024, (ii) have not been Italian tax residents in the previous 3 fiscal years (or longer periods depending on the identity of their employer), (iii) commit to remaining tax resident in Italy for at least 4 years after the relocation, (iv) perform their work activity primarily in Italy and (v) are “highly qualified” or “highly specialized” personnel (the IW Regime);
• Non-Italian source income and non-Italian asset may be subject, upon exercise of a dedicated option, to an yearly flat tax of €200,000 (rather than to the ordinary proportional income taxes and local surcharges, wealth taxes on foreign assets and inheritance taxes otherwise applicable) for a 15-year term after the relocation to Italy provided that the individuals transfer their tax residence to Italy after having being resident abroad for at least 9 out of the 10 previous fiscal years (the HNWI Regime). Said regime can be extended to family members by paying an additional yearly flat tax due at €25,000 per each relevant member. The 2026 Budget Law, currently under Parliamentary review, may increase the flat tax to €300,000 for the main taxpayer (and to €30,000 for family members) for impatriates transferring their tax residence to Italy starting from 2026.

It was so far well established that the IW Regime and the HNWI Regime could not be jointly enjoyed by individuals relocating their tax residence in Italy and meeting all the relevant requirements under those two regimes. Such conclusion was based on the wording of Law No. 232 of 2016, which expressly prohibited the cumulative application of the HNWI Regime with the IW Regime at the time regulated by Article 16 of Legislative Decree No. 147 of 2015.

However, following the repeal of Article 16 and the introduction, as of 1 January 2024, of the above summarized new IW Regime under Article 5 of Legislative Decree No. 209 of 2023, the above-mentioned statutory prohibition has not been amended to reflect the new legislative framework.

In the absence of an explicit provision extending such prohibition to the currently applicable IW Regime, tax practitioners started questioning whether the impossibility to jointly apply the HNWI Regime and the IW Regime still stand.

With a Ruling published on 19 December 2025, the Italian Revenue Agency resolved such interpretative uncertainty and confirmed that, in the absence of an explicit statutory prohibition, the HNWI Regime and the IW Regime can now be applied concurrently, allowing taxpayers to benefit from each within its respective scope.

This Ruling significantly enhances Italy's appeal as a competitive destination also for top-tier professionals (normally benefitting from stock option and other incentive plans), allowing them to optimize their Italian-source income under the IW Regime while simultaneously leveraging the HNWI Regime for their foreign income and assets – subject to careful evaluation as to the tax regime applicable to income arising under incentive plans after their relocation to Italy.

Authored by Serena Pietrosanti, Maria Cristina Conte, and Noemi Gerbasi.