Italy has established itself as an attractive destination for individuals, offering a range of tax relief measures designed to attract labour talent and investment. Among these measures, the inpatriate regime has emerged as the most utilised and successful framework in recent years (see Fig 1).[1]
Figure 1

Originally introduced in 2015, the regime was conceived to encourage highly skilled professionals and entrepreneurs to relocate to Italy by offering significant tax benefits. Over time, its provisions have been subject to numerous revisions. These adjustments have often sought to simplify access requirements and extend eligibility to a broader audience, reinforcing the regime’s appeal. However, in some instances, changes have introduced stricter criteria, thereby narrowing the scope of potential beneficiaries.
A recent and notable development in this regard is Legislative Decree No. 209/2023 art. 5, which made substantial modifications to the inpatriate regime. This reform not only tightened the eligibility requirements but also reduced the percentage-of- income exemption previously available to qualifying individuals, signalling a recalibration of the regime's objectives and benefits.
The legislation introduced changes regarding the eligibility requirements to qualify for the regime, summarised as follows:
The legislation also introduced a cap of EUR 600,000 per year (not for the entire five-year period) as the maximum taxable income that is eligible for the 50% tax relief; previously, the exemption applied to 70% or 90%. The portion eligible for tax relief is set at 60% if the employee relocates to Italy with a minor child, or if the employee has or adopts a child during the period of qualification for the tax regime.
The new provisions apply to those workers who move their tax residence to Italy starting from tax year 2024 and during the subsequent four tax years.
A special interim treatment has been reserved for those who moved their civil residence to Italy (that is, individuals who were registered in the civil records of an Italian municipality) before 31 December 2023. Specifically, the previous rules (tax exemption of 70% or 90%) provided by art. 16 of Legislative Decree no. 147/2015 still applies to those who obtained civil residence in Italy before 31 December 2023 and to those employees who exercised the option in previous tax years and who are maintaining the treatment that was applicable in the year when they moved to Italy.
While waiting for the relevant authorities to release updated data on the number of employees who have benefitted from the inpatriate tax regime in the last few years, the new rules are set to narrow the criteria for accessing the regime, making it more difficult for employees to benefit from this tax advantage. This could lead to a reduced pool of beneficiaries and raise concerns about whether the new provisions may discourage employees from relocating to Italy. Such changes could potentially harm the business environment and undermine Italy's appeal as a destination for international talent.
Carmela Bisesti
BDO in Italy
Figure 1
Originally introduced in 2015, the regime was conceived to encourage highly skilled professionals and entrepreneurs to relocate to Italy by offering significant tax benefits. Over time, its provisions have been subject to numerous revisions. These adjustments have often sought to simplify access requirements and extend eligibility to a broader audience, reinforcing the regime’s appeal. However, in some instances, changes have introduced stricter criteria, thereby narrowing the scope of potential beneficiaries.
A recent and notable development in this regard is Legislative Decree No. 209/2023 art. 5, which made substantial modifications to the inpatriate regime. This reform not only tightened the eligibility requirements but also reduced the percentage-of- income exemption previously available to qualifying individuals, signalling a recalibration of the regime's objectives and benefits.
The legislation introduced changes regarding the eligibility requirements to qualify for the regime, summarised as follows:
- Eligible workers must agree to take tax residency in Italy for a term of four years (instead of two as the previous regulations established);
- Eligible workers must not have been tax residents in Italy in the three tax years preceding their move, and in some cases, up to six or seven years, rather than two as under the previous regulations);
- Eligible workers must meet the high qualification or specialisation requirements set forth in Legislative Decree no. 108 of 28 June 2012 and in Legislative Decree no. 206 of 9 November 2007.
The legislation also introduced a cap of EUR 600,000 per year (not for the entire five-year period) as the maximum taxable income that is eligible for the 50% tax relief; previously, the exemption applied to 70% or 90%. The portion eligible for tax relief is set at 60% if the employee relocates to Italy with a minor child, or if the employee has or adopts a child during the period of qualification for the tax regime.
The new provisions apply to those workers who move their tax residence to Italy starting from tax year 2024 and during the subsequent four tax years.
A special interim treatment has been reserved for those who moved their civil residence to Italy (that is, individuals who were registered in the civil records of an Italian municipality) before 31 December 2023. Specifically, the previous rules (tax exemption of 70% or 90%) provided by art. 16 of Legislative Decree no. 147/2015 still applies to those who obtained civil residence in Italy before 31 December 2023 and to those employees who exercised the option in previous tax years and who are maintaining the treatment that was applicable in the year when they moved to Italy.
While waiting for the relevant authorities to release updated data on the number of employees who have benefitted from the inpatriate tax regime in the last few years, the new rules are set to narrow the criteria for accessing the regime, making it more difficult for employees to benefit from this tax advantage. This could lead to a reduced pool of beneficiaries and raise concerns about whether the new provisions may discourage employees from relocating to Italy. Such changes could potentially harm the business environment and undermine Italy's appeal as a destination for international talent.
Carmela Bisesti
BDO in Italy
[1] MEF – Dati e statistiche fiscali accessibile al sito:
https://www1.finanze.gov.it/finanze/pagina_dichiarazioni/public/dichiarazioni.php
https://www1.finanze.gov.it/finanze/pagina_dichiarazioni/public/dichiarazioni.php