The mechanics of the impatriati regime
The rules live in the impatriati provisions of the Decreto Crescita, most recently reshaped by legislation in 2024. Someone relocating to Italy from abroad pays IRPEF on only 30% of their Italian employment income for the first five years of Italian tax residence, with the remaining 70% falling out of the tax base entirely. INPS social security is untouched and still applies to the whole gross salary, because the relief covers income tax and nothing more.
IRPEF itself charges 23% up to €28,000, 35% from €28,001 to €50,000 and 43% above that. Apply those rates to a base of just 30% of salary and the effective burden on total gross works out at roughly 7%, 10.5% and 13%, against the 23% to 43% an ordinary Italian taxpayer meets.
The real numbers, with and without it
Net figures are shown after IRPEF and the employee INPS contribution of about 9.19%. The addizionali regionali and comunali, the regional and municipal surtaxes, are approximated at 1.8% of taxable income. Standard figures use the full IRPEF brackets.
Who qualifies, and the conditions that catch people out
Qualification is narrow, and narrower than under the original 2019 decreto. The 2024 revision requires an applicant to have been outside Italian tax residence for both of the two tax years preceding the move, to commit to remaining an Italian tax resident for at least two years, and to perform the work mainly on Italian soil.
That two-year requirement trips up returning Italians more than anyone else. Three years spent in London clears the bar without difficulty. Eighteen months does not, however thoroughly someone had relocated their life. The test rests on the Italian concepts of residenza anagrafica, municipal registration, and abituale dimora, habitual abode, and both must have been outside Italy for the entire qualifying window.
Foreign nationals are not excluded. They qualify either through a spell of Italian fiscal residence in the past or by meeting the general conditions while arriving from a country with which Italy has an administrative cooperation agreement, which in practice covers nearly all of the EU and OECD. The basic 70% exclusion has never demanded an Italian passport.
The southern extension: a 90% exclusion in the Mezzogiorno
Fewer people know about the southern variant, which lifts the exclusion to 90%, taxing only a tenth of income, for anyone settling in Abruzzo, Molise, Campania, Puglia, Basilicata, Calabria, Sardegna or Sicilia. On €60,000 gross the effective IRPEF rate drops to somewhere near 3.5%, producing take-home figures that are hard to find anywhere else in Europe.
Take-up among high earners is thin, simply because the professional job markets down there bear no resemblance to Milan or Rome. Those who do use it tend to work remotely, freelance or run their own businesses, and several southern towns have leaned into exactly that, marketing cheap living, deep local culture and the enhanced exclusion as a package aimed squarely at that group.
The Milan picture: who is moving and why
Since 2020 Milan has taken in a steady flow of skilled arrivals claiming the regime. The most visible cohort came out of London fintech, investment banking and private equity, where post-Brexit uncertainty combined with the Italian exemption made the comparison a matter of simple arithmetic, particularly for non-British staff already weighing a softer pound against Britain's post-pandemic tax changes.
Italians returning after years in London, Amsterdam, New York or Singapore make up another large share, and the policy was drafted partly with them in view. Brain drain has run steadily since 2008, and the incentive is an open attempt to make coming back pay as well as staying away.
Because the relief runs for five years, a decision arrives at the end of it, when rates revert to ordinary Italian levels, an effective 28% to 35% for professionals between €50,000 and €90,000. Some people leave again. Others, by then with children in school and a life built around them, stay and pay the full rate. Rome has since added modest extensions for those with dependent children or who buy a home in Italy, an acknowledgement that roots hold people better than tax rates do.
Practical points worth knowing
Nothing is automatic. The relief has to be claimed, which normally means notifying your employer as the Italian contract starts so payroll applies the reduced withholding from the first payslip. Miss that and it can still be recovered through the annual return, the modello 730 or modello redditi, at the cost of waiting months for your own money. A commercialista who has handled the regime before is worth tracking down, because the paperwork and the way it interacts with social security treaties are anything but straightforward.
Limits do exist. Company directors who are not also employees fall outside it. Self-employed income under a partita IVA taxed through the forfettario flat-rate scheme cannot be combined with it. Neither the addizionale regionale, typically 1.22% to 3.33% depending on region, nor the addizionale comunale of up to 0.9% is reduced, and both keep applying to full taxable income. What remains is still far below what an ordinary Italian taxpayer parts with.
Calculate your Italian net salary with or without the impatriati regime using our Italy salary after tax