The tax incentive for new residents is intended for individuals who move their residence for tax purposes to Italy and consists in the possibility of paying a substitute tax on income generated abroad. It is possible to opt for this benefit, which has a maximum duration of 15 years, regardless of nationality. In fact, access is allowed both to foreign citizens and to Italians, provided they have been a fiscal resident abroad for at least nine of the 10 tax periods preceding the one in which the choice becomes effective. Individuals already resident in Italy can also benefit from it. In this case, the tax period in which the residency for tax purposes in Italy has been obtained must be considered in the assessment of the time requirement. Italian citizens canceled from registers of the resident population and who moved to states or territories having a preferential tax regime can also benefit from the incentive. However, they must be able to overcome the presumption of residence in Italy. In other words, the Italian citizens who move to Italy from a state with preferential tax regime "tax haven" can benefit from the incentive provided that she or he proves that she or he has not actually been resident in Italy for at least nine of the 10 previous tax periods. Individuals benefiting from the favorable tax incentive may request its extension to one or more of the following family members: spouse or member of a civil partnership; children, even adoptive ones, and, in their absence, the direct relative in the descending line; parents and, in their absence, the direct relative in the ascending line; adopters; sons–in-law and daughters-in-law; father-in-law and the mother-in-law; brothers and sisters. In order for the tax incentive to be extended to family members, they also need to move their residency to Italy. Also family members must have been residing abroad for at least nine of the 10 tax periods prior to the one in which person moves to Italy. Only income generated abroad is subject to the substitute tax. Income generated in Italy is taxed according to the ordinary rules. The following items of income fall within the scope of the regime: income from self-employment generated from activities carried out abroad; income from business activities carried out abroad through a permanent establishment; income from employment carried out abroad; income from a property that the new resident owns abroad. They also include: interest from bank accounts paid by non-residents; capital gains generated by the new resident following the sale of unqualified shareholdings in foreign companies. Capital gains resulting from the sale of qualified participations (held in companies and non-resident entities) made during the first five tax periods of application of the tax incentive cannot be subject to the substitute tax. This is to avoid that the individual who holds a qualified shareholding in a foreign company able to generate a considerable capital gain, decides to move his/her residence to Italy for the sole purpose of benefiting from the tax incentive.
