In the heat of August, last year, one of the richest Italian families, Agnelli, gave the tax authorities in the country a cold shower by announcing that they’d moved their headquarters to Amsterdam.
Agnelli’s company Exor, which owns 55% of FIAT, Ferrari and FC Juventus, has a market value of €12 billion and the transition towards the “favorable tax climate and softer rule pressure in the Netherlands” wasn’t well accepted in Le Bel Paese.
However, the Italian authorities seem to have learned their lesson because just a few days ago, the country advertised its new flat tax law aiming to attract wealthy foreigners. Potentially, more than 1000 “paperoni” (the nickname for wealthy people, coming from the Italian translation for Disney’s Uncle Scrooge character) are expected to take the offer and bring also new investments, boost the luxury real estate market and increase consumption.
There are 3 conditions for anyone who wants to join the new tax haven:
– To have lived OUT of Italy 9 of the last 10 years
– To have an income OUT of Italy
– To register as an Italian citizen so the country becomes his/her tax state
Those who meet these conditions are obliged to pay the annual flat rate of €100,000 and then to enjoy the rest of their money; no matter if that is €200,000 or €2,000,000. In addition, for only €25,000 a year the new Italians can invite close family members to enjoy the same tax rate conditions as them.
Ronaldo’s New home?
La Bel Paese might be the new home for many rich footballers like Christiano Ronaldo. The multimillionaire athlete proved that he is a wise businessman. Last year, for example, he moved millions he made from commercials, through Ireland and towards an offshore company in the Caribbean, avoiding paying any taxes. Beautiful Italy is much closer. Additionally, other sportsmen like Formula 1 drivers, UPC fighters, golfers, tennis players, who receive their payments from activities outside Italy, could benefit from the proposal. According to the Agencia Entrate (Italian Internal Revenue Service), the new Flat Tax can also be used to benefit the ones who already have accounts in low-tax countries.
Discovering the Hot Water
The new Italian preferential taxation isn’t a discovery in the finance world. Actually, the country, is completing the Magnificent Seven Group of EU countries which have already established their names as tax havens. Luxemburg, Ireland, Malta, Cyprus, Holland, and England for years have been considered as a good place to avoid high revenue taxation. Some experts think also that the new Italian Budget Act is aimed particularly at super rich people who, threatened by the insecurity of Brexit, might consider change of residency.
The new flat tax in Italy will be available for renewing for a maximum of 15 years.