On May 1, the Decree for Growth (“Decreto Crescita”, hereinafter “Decree”) was published and therefore entered into force. Among the various economic measures included in the Decree, are several favourable amendments to the special tax regime for new resident workers (so-called “lavoratori impatriati”).

The special tax regime at issue grants individuals who relocate to Italy to perform their working activity a significant exemption from the individual income tax due on their income originating from their work in Italy

The amendments to the regime introduced through the Decree aim at significantly broadening the size and the scope of application of the benefit. Indeed, the most important amendments at issue concern the amount of the exemption from individual income tax, its duration, and the conditions to benefit (and continue to benefit) from it.

Being included in a Government Decree, the amendments at issue are already in force, but they need to be officially converted into ordinary law by the Parliament within 60 days to become permanent. It is possible that further amendments will be added during the conversion, but we do not expect substantial changes.

Amount of the exemption

The exemption from individual income tax, which previously amounted to 50% of the income, has been increased to 70% of the income the new resident workers will originate from Italy. That is, a new resident worker will pay Italian progressive income tax (rates range from 23% to 43%) only on 30% of her/his income. Such exemption is increased to 90% (i.e. only 10% of the income will be taxable) in case the new resident worker relocates to Southern Italy (i.e. in one of the following regions: Abruzzo, Molise, Campania, Puglia, Basilicata, Calabria, Sardinia, Sicily).


Just like the previous version of the special regime, the above exemption (which, as mentioned above, will be of 70% or 90% of the income arising from working activities conducted in Italy) will last for five years (i.e. the year of relocation and the following four years).

However, according to the new amendments, after 5 years a worker will still be able to benefit from a 50% exemption for an additional 5 years if:

1.she/he has at least one under age son/daughter; or 2.she/he has purchased a house in Italy (anywhere in Italy) in the 12 months before her/his relocation to Italy or after the relocation to Italy.

Please note that if the new resident worker has at least three under age children, the exemption is increased to 90% for the additional 5 years period.


The Decree significantly simplifies and harmonizes the requirements to access the special regime at issue.

While, previously, two separate classes of beneficiaries, with different features and requirements with which to comply, were identified – namely executives or managers versus individuals with a university degree - the new version of the provision does not make any distinctions, in terms of requirements and conditions to benefit from the special exemption, between classes of beneficiaries.

According to the new formulation of the provision, the special exemption will be open to any employee, self-employed worker, or entrepreneur who relocates to Italy to the extent that:

  • she/he has been resident outside of Italy during the two previous years (previously, the requirement for managers and executives was five fiscal years of residency abroad),
  • she/he commits to reside in Italy for at least two years (otherwise the benefits will be recovered by the Italian Tax Authorities), and
  • the working activity is mainly performed on Italian territory.

The Decree extends the tax incentive also to those individuals who move their residence to Italy and start a business activity in Italy.

Furthermore, the Decree clarifies that new residents who are Italian citizens and who have not cancelled their name from the list of Italian resident population (“Anagrafe della Popolazione Residente”), but have been tax resident of a foreign country pursuant to a tax treaty against double taxation for the prior two years, also qualify for the special regime.

All of the above amendments concerning the amount of the exemption and its duration make the relocation of workers to Italy even more appealing than before. However, according to the current wording of the Decree (which may be slightly corrected during the conversion into ordinary law by the Parliament) please note that the new amendments - i.e. the new 70% exemption and the other additional measures briefly described above - will apply to individuals who become tax residents of Italy starting from 2020. If a person becomes a resident of Italy in 2019, she/he will qualify for the "old" version of the regime (i.e. 50% exemption and not the "new" 70% - or 90% - exemption, without the possibility to benefit of a 50% exemption for additional five years, and subject to the different conditions provided for the different classes of beneficiaries).

Please note, finally, that the special tax regime for new resident workers is part of a more comprehensive package of measures that Italy has implemented in the past years to attract individuals. Besides the tax regime described above, indeed, other preferential tax regimes are open to:

  • Professors/researchers: 90% exemption from individual income tax, for five years,
  • Pensioners: a special 7% flat tax on foreign sourced income, for five years,
  • HNWIs: a special €100,000 yearly lump sum and substitute tax on foreign-sourced income, for fifteen years.