Italy doubles flat tax on rich moving to the country

By Giovanni Legorano

ROME (AA) - Italy’s government approved Wednesday a new law doubling to €200,000 ($218,600) the yearly flat tax applied on the income of wealthy people who will transfer their tax residency to the country.

“We are against triggering a new season of competition to create situations of fiscal favors to people and companies,” Economy Minister Giancarlo Giorgetti told reporters.

“If this competition starts, countries like Italy, which have very limited fiscal space, are bound to lose,” Giorgetti said.

The tax break was introduced in 2017 by another government to attract foreigners with high incomes to the country and benefit from the additional tax revenue. However, it was criticized by many international institutions, including the EU, as unfair and detrimental to the country’s fragile finances.

The double tax will only apply to those who transfer their fiscal residence to Italy in the future. Those who have done it since the incentive was introduced, which are 1,186, according to the minister, will continue to pay €100,000 per year.

“It’s honestly very hard to assess how much they have reinvested in Italy,” Giorgetti said, referring to those who have benefited from the flat tax so far.

Giorgetti also said that no additional tax will be levied on banks, as it was floated in media reports in recent days.