We have spoken with many international people who are still paying substantial fees and charges for advice, services and products which are not tax efficient and suitable for Italian residents and so we strongly encourage current and prospective Italian residents to review their current arrangements with us!

Setting up your financial planning  to meet your goals and objectives whilst being cost effective, tax efficient and compliant for Italian residence can be straightforward with the right guidance and local expertise. 

The number of international people from around the world, including high net worth and ultra high net worth individuals and families becoming resident in Italy is quickly increasing with many continuing to run into difficulties managing their portfolios. Having expected that their home country banks and financial advisers would be able to continue to help them as Italian residents, many are now discovering that using financial products and solutions designed to work in other territories are most often unsuitable, expensive and even punitive for tax purposes.

Introduction - The concept of residence for tax purposes

According to Article 2 of the Italian Income Tax Code (Dpr n. 917/1986, also called T.U.I.R.), individuals resident in Italy are those who, for most of the tax period, namely for at least 183 days (or 184 days in the case of a leap year), are enrolled in the registers of the resident population or have their domicile or residence in the territory of the Italian State.

The notions of residence and domicile refer to the civil law concepts (Article 43 of the Civil Code), which defines “residence” as the place of habitual abode and the “domicile” as the main place of business and personal interests.

A person is considered resident in Italy for income tax purposes if they meet at least one of the following conditions for most of the year (at least 183 days per year, or 184 for leap years):

• their habitual residence is in Italy
• their domicile, defined as the place where their personal and family relationships are primarily maintained, is in Italy
• they are physically present in Italy, taking into account even fractions of days
• they are registered in the resident population register, unless it can be proven that this registration does not correspond to actual residence on Italian territory. 

Tax and financial planning - Common mistakes and solutions

The Italian tax year runs from 1st January to 31st December whereas countries such as The UK, India, Australia, New Zealand and Hong Kong have different tax years and very different taxation and reporting methods and whilst countries such as France Spain and Germany, which are also 

part of the European Union, follow the same calendar year for tax, this does not mean that investment portfolios such as general investment accounts (GIA's)and individual savings accounts  are tax efficient in Italy. The are in most cases completely unsuitable and inefficient for tax residency in Italy.

General Investment Accounts (GIA’s) are often the recommended portfolio structure for many international clients with more than €250K because they fit well with the overall functionality and business model of the external adviser, bank or investment house offering the service and they allow the client to have a relatively unconstrained choice of investment instruments. 

BUT

Your  commercialista (Italian tax accountant) will need to forensically check every sale and purchase for reporting on the Modello Unico (The Italian Tax Return) and then calculate capital gains tax on each sale and dividend, sometimes across 2 sets of annual statements. Any capital gains tax free allowances you may have enjoyed from previous countries of residence will not apply.

The good news is that setting up your portfolio to be safe, tax efficient and compliant for Italian residence can be simple, straightforward and considerably less expensive than you might imagine

Paul Redmond
Managing Partner

To discuss your own individual circumstances, please click here to book a meeting.

25 September 2025