How does the Italian Expat Tax Regime work in 2026?

The Italian Expat Tax Regime (so-called “Regime Impatriati“) allows eligible workers moving their residency to Italy to exempt 50% of their income from Italian IRPEF (income tax). This incentive is designed to attract “highly qualified” professionals, including employees and self-employed individuals, by significantly lowering their tax burden for the first five years of residency.

The Big Benefit: How Much Can You Save?

The core of the 2026 regime is a substantial reduction in your taxable base. Instead of being taxed on your full salary, you are only taxed on half.

• The 50% Base Cut: You receive a 50% exemption on your first €600,000 of annual income.
• The Family Bonus (60% Exemption): If you move to Italy with a minor child, or if you have/adopt a child while living here, your tax exemption increases to 60%.
• The €600,000 Cap: Earnings above this threshold are taxed at standard Italian rates.

Case Study: The Math in Action

To understand the real-world impact, let’s look at “Sarah,” a software engineer moving from London to Milan with her young daughter.

To understand the real-world impact, let’s look at “Sarah,” a software engineer moving from London to Milan with her young daughter.

Category	Standard Taxation	With Impatriati Regime (60% Exemption)
Gross Annual Income	€100,000	€100,000
Taxable Income	€100,000	€40,000
Estimated Net Pay	~€62,000	~€84,000
Annual Tax Savings	€0	€22,000

Note: These figures are estimates. Actual savings depend on regional taxes and social security contributions.

Who is Eligible for the Italian Expat Tax Regime? (2026 Checklist)

To qualify for the Impatriati regime in 2026, the Italian tax authorities (Agenzia delle Entrate) require you to meet specific “High Qualification” criteria. You must fulfill all of the following:

1. Prior Non-Residency: You must not have been a tax resident in Italy for the three tax years prior to your move.
2. The 4-Year Commitment: You must commit to remaining a tax resident in Italy for at least four years. If you leave early, you must repay the saved taxes with interest.
3. Physical Presence: You must work primarily within Italian territory (more than 183 days per year).
4. High Qualification: You must hold a three-year degree (Bachelor’s) or higher, OR possess a high-level professional qualification backed by at least 5 years of relevant experience.

The “Same Employer” Trap (6 or 7 Year Rule)

Are you moving to Italy while keeping your current job? If you continue working for the same employer (or the same corporate group) you worked for while abroad, the “time away” requirement increases:

• 6 Years: If you never worked for that group in Italy before.
• 7 Years: If you previously worked for that group in Italy before moving abroad.

Pro Tip: This rule also catches self-employed consultants if their former foreign employer remains their primary client.

Impatriati vs. Digital Nomad Visa: What’s the Difference?

Many of our clients ask if the new Digital Nomad Visa automatically gives them the tax break. The answer is: Not necessarily.

While the Digital Nomad Visa (introduced in 2024) allows you to live in Italy, the tax benefit depends on meeting the “Impatriati” requirements mentioned above.

Here is how they compare in 2026:

Feature	Digital Nomad Visa	Impatriati Tax Regime
Primary Purpose	Legal right to live/work in Italy	Tax reduction on Italian income
Income Requirement	Min. ~€25,000/year	No specific minimum
Degree Required?	Yes (or 5 years experience)	Yes (or 5 years experience)
Tax Benefit	None (unless linked to a regime)	50% – 60% Tax Reduction
Best For	Non-EU Remote Workers	All high-earning expats

FAQ: Frequently Asked Questions about the 2026 Regime

1. Can I extend the 5-year benefit? Under the 2026 rules, extensions are generally not available. The previous 10-year extension (for buying a home) was phased out for new arrivals after 2023, with very narrow exceptions.

2. Does this apply to my crypto gains or rental income? No. This specific regime only applies to employment and professional self-employment. Rental income and capital gains (including crypto) are subject to different flat-tax rates or ordinary IRPEF.

3. What happens if I lose my job? If you lose your job but remain an Italian tax resident and find a new role in Italy, you can usually keep the benefit. However, if you leave Italy before the 4-year mark, you will lose the benefit retroactively.

4. Is the “South of Italy” 90% discount still active? For new residents arriving in 2026, the 70-90% discount for moving to Southern Italy (Sicily, Sardinia, Puglia, etc.) has been replaced by the uniform 50-60% exemption across all regions.

How to Apply for the Impatriati Tax Regime

The application process depends on your employment status:

• As an Employee: Submit a formal “Self-Declaration” to your employer. They apply the 50% discount directly to your payslip.
• As a Freelancer: You apply the benefit when filing your annual Italian tax return (Dichiarazione dei Redditi).

The Documentation Hurdle: The Agenzia delle Entrate is increasingly strict. To prove your “high qualification,” you will likely need a “Declaration of Value” from an Italian consulate or a CIMEA certificate. At Tax4Expat, we’ve seen applications denied simply because a degree wasn’t certified correctly—don’t let this happen to you.

Don’t Navigate the Italian Tax Maze Alone

Italian bureaucracy is famous for its twists and turns. We are expats before we are tax advisors—we’ve lived the move, handled the paperwork, and we know the relief of finally having a clear answer.

Whether you need a 1:1 eligibility check or help setting up your Partita IVA (VAT number), we provide professional, human support in plain English.

Contact Tax4Expat today for a personalized consultation and ensure your move to Italy is as tax-efficient as possible!