QROPS Advice: Taxation of ‘Non-Residents’ Living in Italy

The basis for taxation in Italy is determined by an individual’s residential status. Non-residents are only taxed on income and gains arising in Italy, compared to worldwide income and gains for residents. The tax is calculated in the same way as it is for resident individuals, with income tax assessed on the aggregate income derived within Italy.
Certain types of investment income realised by non-resident individuals are subject to a final withholding tax. However, interest on Italian bonds and similar, and interest from debenture loans issued by banks and listed companies, are no longer subject to a withholding tax if received by non-resident individuals who are resident of a State with whom Italy has signed a double taxation treaty providing an exchange of information.
Inheritance and gift taxes are levied without regard to the residence of the deceased/donor or the beneficiary if the transfer is executed in Italy or if the assets are located in Italy.