Italy 2026: EUR300,000 HNWI Flat Tax vs 7% Southern Italy Pensioner Regime Compared

What are Italy's two special tax regimes in 2026?

In recent years Italy has deliberately sought to attract wealthy foreigners and retirees, both as an economic lever against population decline in the Mezzogiorno and as a magnet for mobile international capital. This has produced two legally distinct special tax arrangements:

• Art. 24-bis TUIR (Imposta sostitutiva per neo-residenti), for wealthy individuals with substantial foreign income. Flat annual tax: EUR300,000 (as of 2026, previously EUR100,000).
• Art. 24-ter TUIR (Regime fiscale per pensionati esteri), for retirees from abroad who move to a small southern Italian municipality. Flat rate: 7% on all foreign income including pensions.

Both regimes share the requirement that the person must not have been tax resident in Italy for at least 9 of the last 10 years before applying. Both replace ordinary Italian taxation of the relevant foreign income. Both require an application and are not automatic.

However, they are mutually exclusive. Anyone using Art. 24-bis cannot simultaneously apply for Art. 24-ter, and vice versa. Which regime fits better depends on income structure, wealth level and preferred place of residence.

What are the requirements for the EUR300,000 HNWI flat tax (Art. 24-bis)?

The key points of the 2026 HNWI regime:

Important clarification on the amount: When the programme launched in 2017, the flat rate was EUR100,000/year. The 2024 Budget Law raised it to EUR200,000; Italy's 2026 Budget Law raised it further to EUR300,000, effective for applications from 1 January 2026. Anyone who took up the regime before 2024, or by the end of 2025, is grandfathered and continues to pay the lower original amount until the end of their personal 15-year period.

Many German-language comparison sites still quote EUR100,000 for 2026, a figure that is wrong for new applicants and can lead to serious planning errors.

Who benefits financially from the HNWI flat tax?

The flat tax is payable regardless of the actual amount of foreign income. This produces a clear zone of financial advantage.

Worked example: a German HNWI with a EUR5 million ETF/equity portfolio, 4% distribution/realisation:

In this scenario Italy does not make financial sense. The HNWI regime only becomes advantageous at significantly larger foreign income flows, typically from around 1.5 to 2 million euros of annual foreign income, or with very irregular but large one-off events (a business sale, licensing income, dividends from major shareholdings).

At that level the fixed annual flat tax of EUR300,000 translates into an effective tax rate of 15%, 10% or less, while residing in an EU member state with an excellent quality of life.

A prior profitability analysis should therefore always be part of the planning. Mirabello Consultancy models the break-even thresholds for each client and compares them against the alternatives of Greece (EUR100,000 flat tax), Malta Non-Dom (EUR15,000 minimum tax) and Cyprus (60-day rule with 0% capital gains tax).

What are the requirements for the 7% southern Italy pensioner regime (Art. 24-ter)?

The key features for 2026:

What changed in 2026? Legge 34/2026 (the so-called Decreto SME) came into force on 7 April 2026 and raised the population threshold for eligible municipalities from 20,000 to 30,000. This is estimated to have opened around 74 additional municipalities in the Mezzogiorno to the programme, including several provincial capitals with better transport links, education and healthcare. For DACH retirees this is a meaningful improvement: less compromise, and more choice in quality of life and infrastructure.

An important distinction: the 7% regime is expressly designed for retirees. A 50-year-old entrepreneur moving to Italy with mainly capital income cannot use it. Art. 24-bis is then the only sensible path.

How does Italy compare with Greece, Malta and Cyprus?

A practical comparison of the main EU special tax regimes for DACH high-net-worth individuals in 2026:

The right choice depends on how the foreign income is structured:

• Very high mixed income (EUR2 million+): Italy's Art. 24-bis can push the effective rate down to 10-15%
• Medium to high mixed income (EUR500K-EUR2 million): Greece's HNWI regime at a EUR100,000 flat tax is usually cheaper
• Large ETF/equity portfolio being reinvested: Malta or Cyprus dominate, with no ongoing tax burden on income that is not distributed
• International pensioners (DE/AT/CH pensions): Italy's 7% regime with residence in southern Italy is unrivalled in cost

For a comprehensive overview, we recommend the Mirabello comparison of all golden visa and residency programmes for 2026.

How does German exit taxation interact with a move to Italy?

For German investors with a substantial ETF or shareholding portfolio, this point matters a great deal in practice. Since 1 January 2025, Section 6 AStG also covers investment fund units: anyone holding ETF positions with unrealised gains at the point of emigration must tax these as a deemed disposal gain. On a seven-figure portfolio this can trigger a six-figure tax bill.

Italy offers a clear structural advantage here: as an EU/EEA state, moving to Italy automatically activates the EU deferral rule. The German exit tax is deferred, without interest and without security, until the holdings are actually sold. Further background can be found in our guide to exit taxation on ETFs in 2026.

The combination is therefore notable: a German HNWI moving to Italy can defer German exit taxation and simultaneously use Italy's Art. 24-bis regime with flat-rate taxation of foreign income. For retirees with DACH pensions and a southern-Italy plan, the same principle applies towards the 7% regime.

How does the application process work in practice?

Both Italian special tax regimes require an application and are not automatic. The typical sequence is:

1. Pre-structuring (12-24 months before relocation): analysis of foreign income, modelling the break-even threshold, choosing between Art. 24-bis and Art. 24-ter, coordination with a German tax adviser on exit planning
2. Filing a preliminary ruling request (Interpello probatorio): a written request to the Italian tax authority (Agenzia delle Entrate) confirming in advance whether all requirements are met. Processing time: typically 120 days
3. Establishing Italian tax residence: registration in the Italian population register (Anagrafe), taking up residence, and where relevant purchasing or renting a property
4. Application with the first Italian tax return: activating the chosen regime with the first Dichiarazione dei redditi after establishing residence
5. Annual flat-rate payment: the applicable flat tax is settled through the normal annual tax return

Several checkpoints must be observed along the way: correctly ending unlimited German tax liability, observing the extended limited tax liability under Section 2 AStG, adjusting asset structures (bank accounts, holding companies, foundations), and, especially for families, coordinating the residence status of all family members.

In practice, at Mirabello Consultancy we regularly see clients without professional preparation making formal errors, such as insufficiently documented non-residence, incorrect Anagrafe registration, or applying too late. These errors can cost access to the special tax regime and are often impossible to correct retroactively.

How does a second citizenship (CBI) fit with the Italian tax model?

Italian tax residence is primarily a matter of where you live, not of citizenship. Italy assesses tax residence based on actual physical presence and centre of life; the applicant's citizenship is not decisive for Art. 24-bis or Art. 24-ter.

A second citizenship through Citizenship by Investment (CBI), for example Antigua, St Kitts & Nevis, Grenada or Dominica, can nonetheless usefully complement this model:

• Passport diversification: freedom to travel without dependence on a DACH passport or an Italian residence card
• Asset protection: Caribbean passports are often the basis for international structuring outside the EU
• Optionality: if Italy's special tax regimes change after 9 or 15 years, or clients wish to move on, a second citizenship is a separate, permanent fallback

An overview of all relevant programmes: best residency and citizenship by investment programmes for 2026.

What practical questions come up most often for DACH clients?

From more than 350 residency cases we have handled and our day-to-day advisory practice at Mirabello Consultancy, the following questions come up particularly often, summarised here:

Do I need an Italian investor visa to activate the special tax regimes?
Not necessarily, but it is often useful. EU citizens (Germany, Austria) enjoy freedom of movement and can register in Italy without needing a visa. Swiss nationals benefit from the EU-Switzerland free movement agreement. Third-country nationals need a residence permit, and Italy's investor visa (Golden Visa) is the usual route for them. Detailed requirements and processing routes are described in our full Italy Golden Visa guide.

What is the difference between the 7% regime and Italy's Digital Nomad Visa?
The two arrangements serve different audiences. The 7% regime is a tax regime for retirees with a foreign pension. Italy's Digital Nomad Visa is a residence permit for highly qualified remote workers (the minimum income requirement has been significantly lowered since 2024). Both can be combined with other tax regimes; a comparative overview is available in our Italy Digital Nomad Visa guide 2026.

What role do double taxation agreements (DTAs) play?
Italy's special tax regimes replace ordinary Italian taxation of the covered foreign income, but the DTA remains the underlying framework. Italy has comprehensive DTAs in force with Germany, Austria and Switzerland. In individual cases the flat-rate regime may apply in Italy while the foreign income is still taxed at source in the other state (for example German rental income). A careful DTA analysis is therefore an integral part of every consultation.

For binding, independent information, consult the Italian Agenzia delle Entrate and the OECD tax information.

Frequently Asked Questions: Italy's Flat Tax Regimes 2026

Is it true that Italy's HNWI flat tax only costs EUR100,000?
No, that figure is outdated. EUR100,000 was the rate from 2017 to the end of 2023. The 2024 Budget Law raised the flat tax to EUR200,000; the 2026 Budget Law raised it further to EUR300,000. EUR300,000 applies to all new applications from 1 January 2026. Existing beneficiaries are grandfathered and keep the original flat rate until the end of their 15-year period.

Can I use both Italian regimes at the same time?
No. Art. 24-bis (HNWI, EUR300,000) and Art. 24-ter (pensioner, 7%) are mutually exclusive. The choice must be made at the first application and is binding for its duration. In some cases a different regime can be activated once one regime ends, provided the relevant requirements are met again.

What happens to my ETF holdings when I move to Italy?
German investors benefit from the EU deferral rule for exit taxation under Section 6 AStG: since Italy is an EU member, the deemed-disposal tax on emigration is automatically and indefinitely deferred, without interest and without security. The German tax only falls due when the holdings are actually sold. Under Italy's Art. 24-bis regime, ongoing returns are then covered by the flat rate. More detail: exit taxation on ETFs 2026.

Which southern Italian municipalities are especially attractive for the 7% regime?
Since the April 2026 extension to municipalities of up to 30,000 residents, around 74 additional municipalities are available. Popular locations include areas of Apulia (Lecce province, Itria Valley), Sicily (east coast, Modica, Ragusa), Calabria (the Tropea area) and Sardinia (Cagliari province). The choice should be guided not only by tax considerations but also by quality of life (climate, healthcare, transport links).

How long does it take to establish Italian tax residence?
Actual tax residence is established in the year in which a person is present in Italy for more than 183 days or has their centre of life there. Formal registration in the Anagrafe and the first application for the special tax regime typically take place in the first months after the move. The optional preliminary ruling request (Interpello probatorio) with the Agenzia delle Entrate takes up to 120 days and can be filed before the move.

How do I start Italy tax planning with Mirabello Consultancy?
The first step is a free initial consultation with our experts in Zurich or Dubai. We analyse your specific situation: the level and structure of foreign income, family circumstances, preferred place of residence, time horizon, and the interplay with your German, Austrian or Swiss tax position. On this basis we prepare a tailored recommendation, including the choice of the right Italian special tax regime, coordination with tax advisers in DACH and Italy, and structuring the move. Request expert advice now →