In a bid to entice rich foreigners to its shores, Italy has introduced a preferential tax rate for them.
The new flat tax rate of €100,000 per annum will cover all income received worldwide for foreigners who make Italy their tax residence. To be eligible, a person must live in Italy for more than 183 days a year.
Another €25,000 will be added to the tax bill for eligible applicants who establish Italian residence for close family members.
Excluded are foreigners who have already been living in Italy. Applicants must have lived outside of Italy for nine out of the last ten years.
The new rate may be renewed every year up to a maximum of 15 years, according to Italian tax authorities.
Italy is vying with a number of other European countries, including the UK, which have sweetened their tax requirements in order to entice high net worth individuals and families.
The measure was announced on Wednesday and had already been proposed in the country’s 2017 budget.
The next day Italy’s chamber of Deputies passed a law aiming to reduce poverty, especially for families with young children.
Starting with €1.6 billion set aside this year, families in need will receive a monthly payment of between €400 and €480 depending on means tests.
The switch in policy away from support for individuals on low incomes to helping families is the product of the country’s deep recession which provoked high levels of unemployment throughout the country.
Consequently, the younger generation has been classed as the poorest in Italy. The OECD had urged Italy to act swiftly on the problem of child poverty, as the problem of absolute poverty has rocketed from 3% to 11% in the past decade.
The payment scheme represents “the key pillar of the national plan to fight poverty”, Labour Minister Giuliano Poletti said.
Comments
But it is also a means to reduce the tax paid by the richest people in Europe. Its is grossly unfair to taxpayers who do not benefit from the arrangement.