The Italian Advantage: How Tax Incentives Fuel Hiring and Business Expansion

Map of italy with a red pushpin

portrait of Kurt Von Moos
By Kurt Van Moos, Executive Director, Client Solutions, GoGlobal

Italy’s geographical location, at the heart of the Mediterranean, has historically made it a nexus of trade, culture, and innovation. Today, as part of the European Union, Italy offers businesses access to a vast market and a gateway to both European and African continents. The country’s robust infrastructure, from its ports to its high-speed rail network, facilitates efficient trade and movement. Iconic cities like Milan, Rome and Turin not only enchant tourists but also serve as dynamic centers for finance, technology and industry.  

By strategically attracting global talent, Italy aims to solidify its position as a formidable European force. To fuel this vision, the Italian government has strategically designed a series of enticing tax incentives, a gateway to substantial financial rewards and growth prospects for both international corporations and individuals.  

In this blog post, we illuminate these incentives, spotlighting how Italy is resolute in its aspiration to enrich its economic, scientific and cultural landscape by luring premier human capital from around the world.  

Italy’s economic vision: incentives for progress 

Italy’s vision is clear: to bolster economic development by attracting top-tier human capital. The Italian tax system offers various benefits to individuals who relocate their residence to Italy for work or living purposes. For instance, tax incentives are available for academics (professors and researchers) from abroad who move to Italy.   

There’s also a tax incentive for “impatriates” workers, which includes:

  • Graduates who have worked abroad.  
  • Students who have obtained an academic qualification abroad.  
  • Managers and workers with high qualifications and specializations.  

The 2017 Budget Law introduced new favorable measures to diversify the set of incentives. One such incentive is a substitute tax on income generated abroad, which can also be extended to family members.

Benefits for Individuals Moving to Italy:  

Academics (Professors and Researchers)  90% exemption for 4 years on self-employment or employee income generated in Italy.   
“Impatriate” Workers  50% exemption for 5 years on self-employment or employee income generated in Italy.   
New Residents  15-year substitute tax on income generated abroad, amounting to €100,000 per year (€25,000 for each family member). 

To avail the benefits, one must transfer their tax residence to Italy. Before moving to Italy, the individual should have had their tax residence abroad for a specific minimum period, which varies based on the benefit concerned. The concept of residence for tax purposes is defined by the Italian income tax code, where individuals residing in Italy for at least 183 days (or 184 days in a leap year) are considered residents

More on tax benefits for academics and impatriates

Italy’s tax system is a beacon for individuals contemplating relocation for work or residence. The array of benefits includes special considerations for internationally renowned professors, dedicated researchers and various professionals of distinction.  

The following tables explain these incentives and their eligibility criteria, underscoring Italy’s resounding commitment to global excellence. 

Tax Incentives for Researchers and Professors 

Benefit 
  • Reduced taxation on income from employment and self-employment in Italy 
Income Portion 
  • 10% of total taxable earnings 
Exemption 
  • Exempt from regional tax on productive activities (IRAP) 
Duration 
  • Four years 
Eligibility Criteria 
  • Possess a university degree or equivalent 
  • Maintain permanent residency abroad 
  • Undertake documented research and teaching abroad for at least two consecutive years at accredited institutions 
  • Continue scholarly pursuits within Italy 

Tax Incentives for “Impatriate” Workers 

Benefit 
  • 50% exemption on income from employment/self-employment in Italy 
Duration 
  • Five years 
Eligibility Criteria 
  • Hold a degree 
  • Commit at least two years of uninterrupted work or study abroad 
Employment Requirement 
  • Find employment in Italy as an employee or self-employed 
Additional Requirement 
  • Commit to a minimum two-year residency in Italy for those not having been residents within the previous five tax periods 

Succeeding in Italy with GoGlobal 

Despite the many advantages and incentives for hiring in Italy, navigating the complexities of international relocation and engagement can be daunting. GoGlobal, an international Employer of Record (EOR) and HR service provider, simplifies this process. Our comprehensive suite of services ensures that both businesses and individuals can make the most of the opportunities Italy offers. 

  • End-to-End Support: From understanding the nuances of Italy’s tax incentives to setting up payroll, GoGlobal provides end-to-end support.  
  • Local Expertise: Our team in Italy brings local market knowledge, ensuring that you remain compliant with all regulations while maximizing the benefits.  
  • Customized Solutions: Every business is unique. GoGlobal offers customized solutions tailored to your business needs, ensuring optimal results. 

Contact us to talk with an international HR expert about these incentives and other benefits of expanding, recruiting and hiring in Italy. 

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