Italy Raises Tax on Wealthy Migrants’ Foreign Income by 100%

Europe’s boot just put its foot down regarding wealthy migrants. 

Italy doubled a flat tax on the foreign income of new residents, upping it from €100,000 to €200,000 annually. 

When in Rome

One way for the rich to lighten their tax bill is by claiming their tax domicile in a new country with lesser tax burdens. And Italy wanted them to feel right at home. 

In 2016, the nation launched an attractive tax on money made outside the country by new, high-net-worth residents. €100,000 a year ain’t a lot when you’re making millions, if not billions:

• The strategy — often referred to as “the footballer’s scheme” after Portuguese forward Cristiano Ronaldo moved to Turin in 2018 — has brought in at least 2,730 millionaires, the Financial Times reported. Plenty of private-equity fund managers from the UK have also moved or are planning to move to Italy to avoid higher rates in their home countries, according to Bloomberg.
• But both public outcry over the rich migrants who’ve caused the cost of living to go up in cities like Milan and the country’s roughly $3 trillion in national debt pushed the Italian government to bump up the tax. The increased levy will only extend to new, wealthy migrants; everyone else is grandfathered into the old rate.

Death and Taxes: Italy’s neighbor to the north also has a plan to put more pressure on its super-rich residents. Switzerland is currently debating whether to put a 50% tax on inheritance above 50 million francs ($59 million). The measure would surely affect the dozens of wealthy Norwegians who fled the fjords for the Alps after Oslo increased the country’s wealth tax to 1.1% in 2022.