ITALY IMPATRIATE TAX REGIME 2026: HOW FOREIGN PROFESSIONALS AND MANAGERS CAN REDUCE ITALIAN TAX

Updated September 2026

Moving to Italy for work can offer a significant tax opportunity. Under the current Italian Impatriate Workers Regime, qualifying employees and professionals may generally pay Italian income tax on only 50% of eligible Italian-source employment or professional income, up to €600,000 per year.

If the qualifying worker moves to Italy with a minor child, the taxable portion can fall to 40%, meaning that 60% of the eligible income is excluded from taxable income.

The rules, however, have become more technical. In particular, professionals moving within an international corporate group, remote workers and people working through an Employer of Record should check their position before changing tax residence.

The legislation is currently contained in Article 5 of Legislative Decree No. 209/2023.

Quick answer: who can benefit from the Italian Impatriate Tax Regime?

A worker moving to Italy may qualify if, broadly:

Requirement	Main rule
Previous foreign tax residence	Normally at least 3 tax years
Same employer or same group	Previous foreign residence may increase to 6 or 7 tax years
Residence in Italy	Commitment to remain tax resident for at least 4 years
Work performed in Italy	Activity must be performed mainly in Italy
Professional qualification	High qualification or specialisation required
Eligible income	Employment, employment-like and qualifying professional income
Maximum eligible income	€600,000 per year
Normal exemption	50%
Minor child	60% exemption, subject to the conditions
Ordinary duration	5 tax years

This apparently simple table hides several traps. The most important question is often not “Am I moving to Italy?”, but “Who did I work for before the move and who will I work for after it?”

The practical 3, 6 or 7-year test

This is one of the most important checks to perform before relocating.

Case 1: new independent employer

You worked abroad for Company A and after moving to Italy you start working for unrelated Company B.

Foreign residence generally required: 3 tax years.

Case 2: same employer or same corporate group

You worked abroad for Company A and after moving to Italy you continue working for Company A or another company in the same group.

Foreign residence generally required: 6 tax years.

Case 3: return to the same group you previously worked for in Italy

You worked in Italy for Company A, moved abroad within the same group and later return to Italy to work again for the same employer or group.

Foreign residence may need to cover 7 tax years.

This is particularly relevant for multinational managers, executives and employees returning to an Italian headquarters.

Smart working from Italy can qualify

A significant clarification concerns remote workers.

The Italian Revenue Agency has accepted that a person moving to Italy may benefit from the regime while continuing to work remotely for a foreign employer, provided the statutory conditions are met and the activity is performed mainly in Italy.

However, if the foreign employer is the same employer for which the individual worked before moving, the enhanced 6 or 7-year foreign residence requirement must also be examined.

There is another issue that businesses should not ignore: extended home-office activity in Italy may, in certain circumstances, create questions concerning a possible Italian permanent establishment of the foreign company.

This means that tax planning should consider both the worker and the foreign employer.

Employer of Record: a new issue for international workers

One of the most interesting developments in 2026 concerns Employer of Record structures.

According to the interpretation examined in the attached technical analysis, where the foreign EOR and the Italian EOR belong to the same group, the Italian Revenue Agency may apply the longer 6 or 7-year residence test, even where the underlying businesses benefiting from the worker's activity are unrelated.

This deserves careful review before signing the Italian employment contract.

Using an EOR does not automatically prevent access to the Italian tax relief, but the corporate relationships between the foreign and Italian EOR entities can materially affect eligibility.

You may qualify even without a university degree

Another useful development concerns the requirement for high qualification or specialisation.

A university degree is not always essential.

Depending on the professional activity, sufficient professional experience may satisfy the qualification requirement. The rules may cover, for example:

• professionals with at least five years of relevant experience;
• certain ICT managers and specialists with at least three years of relevant experience acquired during the previous seven years;
• regulated professionals meeting the relevant professional requirements.

This is particularly important for experienced international managers, technology specialists and project managers who have built their careers through professional experience rather than academic qualifications.

New opportunity for Artificial Intelligence researchers

The rules have also been extended to individuals who have carried out research, including applied research, in artificial intelligence technologies.

This is a particularly interesting development for AI researchers, engineers and technology professionals considering relocation to Italy.

The updated wording is now reflected in the current version of Article 5 of Legislative Decree 209/2023.

Minor children can increase the tax exemption

The ordinary regime taxes only 50% of qualifying income.

When the statutory requirements concerning a minor child are satisfied, the taxable percentage can fall to 40%.

The enhanced relief can apply when:

• the worker moves to Italy with a minor child;
• a child is born during the qualifying period;
• a minor child is adopted during the qualifying period.

The child must be resident in Italy during the relevant period.

A useful clarification is that the relief is not necessarily lost when the child subsequently reaches the age of 18 during the remaining qualifying period.

Where both parents independently qualify as impatriate workers, each may potentially benefit from the enhanced regime.

€600,000 annual limit: how it works

The €600,000 figure is a maximum amount of income eligible for the regime, not an income threshold causing the entire relief to disappear.

Example:

A qualifying professional earns €750,000 in Italy.

The relief may apply to the first €600,000, while the remaining €150,000 is subject to ordinary taxation.

Where the taxpayer receives both employment income and professional income, the €600,000 ceiling must be considered globally for the eligible income.

Employees and self-employed professionals

The regime can apply to:

• employees;
• certain income treated as employment income;
• self-employed professionals carrying on arts or professions.

It does not generally extend to business income generated by an individual entrepreneur.

This distinction can be crucial when choosing how to structure professional or entrepreneurial activity after moving to Italy.

What happens if you move to Italy during the year?

The year of relocation deserves specific attention because Italian tax residence rules changed from 2024.

Italian tax residence can arise based on different criteria, including physical presence, habitual residence, personal and family relationships and registration with the Italian resident population registry.

The timing of the move therefore needs to be planned carefully.

A person who moves too late in the year may not become Italian tax resident for that year and may consequently lose one year of expected tax planning.

How do you actually obtain the tax benefit?

For employees, the safest practical approach is generally to prepare a written request for the Italian employer.

The documentation should normally establish:

1. identity and Italian tax code;
2. date of transfer to Italy;
3. previous foreign tax residence;
4. whether the 3, 6 or 7-year condition applies;
5. commitment to remain in Italy for at least four years;
6. performance of the activity mainly in Italy;
7. professional qualification or specialisation;
8. details of minor children where the enhanced regime is requested.

If the employer does not apply the relief through payroll, qualifying taxpayers may in appropriate circumstances claim it through the Italian income tax return.

Self-employed professionals generally claim the relief through their Italian tax return.

Important change from 2027: Impatriate Regime and Italian Flat Tax

This is one of the most important planning points for wealthy individuals.

The 2026 legislation expressly provides that, for transfers of tax residence to Italy from 2027, the Impatriate Workers Regime and the special regime for new residents under Article 24-bis of the Italian Income Tax Code cannot be used simultaneously.

The change was introduced by Decree-Law No. 38/2026, converted into Law No. 88/2026.

For taxpayers who became Italian tax residents between 2024 and 2026, the position is different and deserves a specific case-by-case analysis.

For executives, entrepreneurs and high-net-worth professionals with substantial foreign income, the difference can be financially significant.

Practical checklist before moving to Italy

Before changing residence, I recommend checking these points in this order:

1. Establish the exact year of Italian tax residence.

2. Reconstruct the previous 3, 6 or 7 tax years.

3. Identify every employer, group company or EOR involved.

4. Determine whether your income will qualify as employment or professional income.

5. Check whether the activity will actually be performed mainly in Italy.

6. Document your professional qualification or relevant experience.

7. Check whether the enhanced relief for minor children applies.

8. Compare the Impatriate Regime with other Italian tax regimes before making the move.

A tax incentive can be extremely valuable, but relocation should not be planned around one percentage alone. Employment contracts, foreign income, social security, family circumstances and future exit plans can substantially change the final result.

Why professional advice matters before relocating

International tax incentives work best when they are analysed before the relocation takes place.

A good Italian tax adviser should not simply confirm whether a tax relief exists. The adviser should examine the employment history, international tax residence, corporate group structure, income categories and family position, then explain which solution is sustainable if challenged by the Italian Revenue Agency.

Studio Cavallari assists foreign professionals, managers and international businesses moving to or operating in Italy, coordinating the Italian tax position with foreign advisers where necessary.

Dott. Massimo Cavallari
Commercialista da oltre 25 anni, iscritto al n. 932/A Padova ed Esperto de Il Sole 24 Ore.

Tel. +39 049 613584
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FAQ

Can I use the Italian Impatriate Regime while working for a foreign employer?
Yes, potentially. Remote work for a foreign employer can qualify, provided the activity is mainly carried out in Italy and the other statutory conditions are met.

Do I need to have lived abroad for three years?
Normally yes, but the period can increase to six or seven tax years when there is continuity with the same employer or corporate group.

Do I need a university degree?
Not necessarily. Relevant professional experience can in certain cases satisfy the qualification requirement.

Can self-employed professionals benefit?
Yes, qualifying professional income can benefit. Business income is generally excluded.

How much income can benefit?
Up to €600,000 of qualifying income per tax year.

How long does the regime last?
Normally five tax years, starting with the year in which Italian tax residence is acquired.

Can both parents obtain the enhanced relief for a minor child?
Potentially yes, if both independently meet the requirements for the Impatriate Regime.

Can the Impatriate Regime be combined with the Italian new-resident flat tax?
For transfers from 2027 the legislation expressly prevents simultaneous application. Transfers made in 2024-2026 require separate analysis.

Official sources:
Article 5, Legislative Decree 209/2023 - Normattiva
Decree-Law 38/2026 converted into Law 88/2026 - Gazzetta Ufficiale