The reference framework for 2026 is, first and foremost, Law No. 199 of 30 December 2025 ("State budget for the 2026 financial year and multi-year budget 2026–2028"), in force since 1  January 2026. Alongside the budget law, the following elements are also relevant:

(i) the AIRE registration and sanction framework introduced by the 2024 Budget Law; (ii) the new rules on tax residence (reformed in 2024) and the implementing practice of the Agenzia delle Entrate; (iii) certain parliamentary legislative processes concerning healthcare and real estate, which, at present, have not yet been definitively concluded.

1 Healthcare coverage for AIRE registrants in non-EU/non-EFTA countries: measure under discussion (not yet an "acquired right")

A legislative proposal is currently under discussion in Parliament (approved at first reading in the Chamber of Deputies and awaiting approval by the Senate) which would extend access to healthcare services covered by the Servizio Sanitario Nazionale to Italian citizens duly registered with AIRE and residing in non-EU and non-EFTA countries, subject to possession of the national health card and payment of a flat annual contribution.

Regulatory structure of the proposal

▪ Proposed legislative basis: amendment to Article 19 of Law No. 833 of 23 December 1978 and related provisions.

▪ Legislative process: approval by the Chamber of Deputies (first reading) and referral to the Senate; as of February 2026, the proposal is still under examination in the other chamber of Parliament.

▪ Core provisions (according to the parliamentary texts):

▪ Annual contribution: €2,000, non-prorated, effective from the date of issuance of the health card; provision is made for possible adjustment in line with the ISTAT index (as stated in the legislative text).

▪ Minors: exemption from the contribution, conditional upon participation by at least one parent or legal guardian (as provided in the text approved by the Chamber).

▪ Scope of application: AIRE registrants residing in non-EU and non-EFTA countries;

▪ coverage for outpatient, hospital and pharmaceutical services, as well as general practitioner services, during periods of stay in Italy;

▪ Application procedure through consular channels or the territorially competent local health authority (ASL), with traceable payment methods.

Technical note (important): since the legislative process has not yet been completed, the measure should currently be treated as a potential option, rather than as a formally confirmed regulatory framework (pending final approval and publication in the Gazzetta Ufficiale).

2 Real Estate and AIRE: "First Home" and Small Municipalities between Current Law and Potential 2026 Measures

2.1 "First Home" tax relief (current law): registration tax and mortgage/cadastral taxes

The "first home" benefit remains governed by Note II-bis to Article 1 of the Tariff, Part I, annexed to Presidential Decree No. 131 of 26 April 1986 (Consolidated Registration Tax Act). In summary:

▪ Reduced registration tax (generally 2% instead of 9% for transfers subject to registration tax) and fixed mortgage and cadastral taxes, provided the relevant subjective and objective conditions are met;

▪ Forfeiture of the benefit in the event of resale within five years unless another qualifying property is purchased within the statutory timeframe, in addition to the other conditions set out in Note II-bis.

Relevant administrative practice for AIRE registrants:  The Agenzia delle Entrate has confirmed the applicability of the benefit in AIRE-related cases, providing interpretative criteria concerning the territorial connection requirement (e.g., the municipality where studies were undertaken) in Ruling No. 312 of 15 December 2025. More broadly, guidance from the Italian Revenue Agency (through responses to advance tax rulings) has shown, in several cases, a substance-over-form approach in assessing territorial links (e.g., municipality of previous studies or family roots), while maintaining that the assessment must be conducted case by case.

2.2 Small municipalities (< 5,000 inhabitants): "targeted" measures for AIRE registrants (still pending)

A bill currently pending in Parliament (already approved at first reading by the Chamber of Deputies) proposes measures concerning:

▪ IMU (municipal property tax): equalisation mechanisms or tax benefits for one residential property owned by AIRE registrants in municipalities with fewer than 5,000 inhabitants, with graduated mechanisms (in some interpretations based on cadastral value brackets) and potential implications also for TARI (waste tax).

▪ Registration tax: the same legislative initiative also indicates possible amendments to the Consolidated Registration Tax Act (Presidential Decree No. 131/1986).

Point of caution: although several sources refer to the measures as entering into force "from 2026", the legislative process is still ongoing in the Senate (bill tracking sheet). Consequently, from an operational standpoint, it is prudent to treat the small-municipality relief regime as a potential future development, rather than as a definitively enacted framework, until its publication in the Gazzetta Ufficiale.

Until 2026, taxpayers must continue to refer to the ordinary IMU rates set by individual municipalities, unless they fall within special regimes already in force, such as those applicable to certain foreign pensioners. The bill proposes an IMU reduction for a single non-rented property, but this benefit would be conditional upon verification of the cadastral value, which may be structured in brackets according to the modalities outlined in the legislative text.

3 IMU and Italians Living Abroad: Current Framework and Outlook

3.1 Current framework (already in force)

Physical Presence from 2024 (even if fragmented) for the majority of the year (183 days) has become a key statutory criterion. It should be noted that mere registration with AIRE is not, in itself, sufficient to shield an individual from Italian taxation: if the centre of vital interests (family and/or business) remains in Italy, the tax authorities may still consider the individual tax resident in Italy.

The national IMU framework remains governed by Law No. 160 of 27 December 2019 and related provisions, together with sector-specific reliefs already provided for certain categories (for example, foreign pensioners, subject to specific requirements and conditions).

3.2 Proposal concerning "AIRE residents in small municipalities"

The proposal approved by the Chamber of Deputies (now under examination by the Senate) aims to grant IMU relief for a single residential property, provided that it is not rented out nor granted for free use, located in municipalities with a population of up to 5,000 inhabitants, with a progressive structure (based on cadastral value brackets according to journalistic and technical reconstructions).

4 Tax Residence, AIRE Registration and the Sanctioning Framework: Rules and Audit Risks

4.1 Tax residence (individuals): criteria and administrative practice

For AIRE registrants and new residents, the key factor is not only registration in the population registry, but substantive tax residence.  For income tax purposes, tax residence is governed by Article 2 of the Italian Income Tax Act (TUIR) — Presidential Decree No. 917 of 22 December 1986 — as amended from 2024, and further clarified through administrative practice by the Agenzia delle Entrate.

For most of the tax period, relevant factors include:

▪ residence or domicile pursuant to Article 43 of the Italian Civil Code

▪ physical presence in the territory of the State

▪ presumptions connected to population registry registration

Typical risk indicators in factual tax assessments include:

▪ physical presence in Italy for the majority of the tax year

▪ the centre of vital interests (family, social relationships, economic activities)

▪ stable availability of housing and actual integration in the territory

For individuals maintaining ties with another State, it may be necessary to apply the "tie-breaker" clauses provided for in double taxation treaties in order to resolve potential conflicts of dual residence. These generally examine:

▪ permanent home

▪ centre of vital interests

▪ habitual abode

▪ nationality (and, ultimately, the mutual agreement procedure)

A rebuttable presumption also remains in place for transfers to low-tax jurisdictions, under Article 2(2-bis) of the TUIR, which requires particularly robust documentation.

4.2 AIRE obligations and penalties for failure to register

On the administrative registry side, penalties for failure to register with AIRE were strengthened by Law No. 213 of 30 December 2023 (Budget Law 2024), Article 1(242), which amended Article 11 of Law No. 1228 of 24 December 1954.

The provision introduced an administrative penalty ranging from €200 to €1,000 per year, for a maximum period of five years.

5 Preferential Regimes for New Residents and “Talent”: 2026 between Confirmations and Adjustments

5.1 New residents regime (Article 24-bis TUIR): increase in substitute tax for transfers from 2026

Law No. 199 of 30 December 2025 amended Article 24-bis(2) of the TUIR, increasing the substitute tax on foreign-source income:

▪ €300,000 for the individual opting for the regime (instead of €200,000)

▪ €50,000 for each included family member (instead of €25,000)

From a structural perspective, the core features of the regime remain unchanged: the application of a flat substitute tax on foreign income, together with coordination with tax monitoring obligations and the wealth taxes IVIE and IVAFE under the framework of Article 24-bis TUIR. The new thresholds apply to individuals who transfer tax residence to Italy from 1 January 2026. Those already benefiting from the regime retain the previous amounts.

5.2 Inbound workers regime (Legislative Decree No. 209 of 27 December 2023, Article 5): framework 2024–2026

The new inbound workers regime remains governed by Article 5 of Legislative Decree No. 209/2023, providing temporary tax relief on employment income generated in Italy, subject to specific requirements and limitations.

Eligibility requirements include a high professional qualification and a commitment to remain in Italy for up to five years.

5.3 Cumulative application of inbound workers and new residents regimes: "open approach" (unpublished ruling)

Part of professional practice refers to a clarification from the Agenzia delle Entrate — contained in an unpublished advance ruling dated 19 December 2025 — which would allow the coexistence of the two regimes, as they apply to different categories of income (inbound workers regime → Italian-source employment income and new residents regime → foreign-source income).

This interpretation potentially allows tax planning combining preferential taxation on Italian income with a flat substitute tax on foreign income. However, it requires clear accounting separation of income sources, supported by proper documentation and record-keeping, in order to avoid potential tax disputes.

Since the ruling has not been publicly released, a high degree of caution is required and the position should be supported by strong documentary evidence and compliance measures.

5.4 Foreign pensioners regime (Article 24-ter TUIR): confirmations and practice 2025–2026

The 7% substitute tax regime on foreign income for pensioners who transfer residence to eligible municipalities (with fewer than 20,000 inhabitants in certain regions) remains governed by Article 24-ter TUIR.

With regard to the scope of application, the Agenzia delle Entrate clarified — in Ruling No. 292 of 21 November 2025 — that the substitute tax may also apply to proceeds connected to the liquidation of foreign companies.

5.5 Professors and researchers (90% exemption): special regime

A specific preferential regime remains available for professors and researchers, historically established by Article 44 of Decree-Law No. 78/2010 (converted into Law No. 122/2010) and subsequently amended. Key elements include:

▪ Tax benefit (90% exemption): only 10% of employment or self-employment income produced in Italy contributes to taxable income.

▪ Eligibility requirements: – at least two consecutive years of teaching or research abroad at universities or research centres (public or private) – possession of a university degree or equivalent qualification.

▪ Residence requirement: acquisition of tax residence in Italy.

▪ Duration: the benefit applies for six tax years, provided tax residence in Italy is maintained. Possible extension: up to 8, 11 or 13 years in the presence of specific conditions (e.g. dependent minor children or purchase of a residential property in Italy).

▪ Exemption from wealth monitoring: during the benefit period, individuals are exempt from foreign asset monitoring obligations (Form RW) and from IVIE and IVAFE on assets held abroad prior to the transfer.

Given the exceptional nature of the regime, coordination with other rules — particularly those relating to foreign asset monitoring — and compliance with minimum residence requirements are essential in order to avoid loss of the benefit and potentially significant penalties.

6 Italian-Source Income for Non-Residents (AIRE): When Taxation Applies in Italy (Article 23 TUIR)

Even if registered with AIRE, a non-resident individual remains within the scope of Italian taxation for Italian-source income pursuant to Article 23 of the TUIR (Presidential Decree No. 917/1986). Therefore, where Italian-source income exists, particular attention should be paid — from a substantive perspective — to the most common cases, including:

▪ real estate income and rental income from property located in Italy (including short-term rentals, where applicable)

▪ taxable capital gains on Italian real estate, subject to the conditions and holding-period rules provided by law

▪ professional fees and employment income for activities performed in Italy, even where the client or employer is foreign

▪ dividends, interest and royalties paid by Italian residents or entities established in Italy, subject to domestic withholding taxes and possible treaty reductions under double taxation agreements

▪ Italian-source pensions, whose taxation must be coordinated with the relevant tax treaty, often distinguishing between public and private pensions

Consequently, depending on the circumstances, a non-resident may face:

(i)  a filing obligation in Italy through the Modello Redditi Persone Fisiche, or 

(ii) taxation at source through withholding tax, possibly final, with a subsequent need to assess whether filing a tax return is still appropriate (for example to claim refunds, tax credits or treaty benefits).

7 Tax Monitoring and Wealth Reporting: Forms RW/W, IVIE/IVAFE and Voluntary Correction

For new residents and individuals who re-establish tax residence in Italy, proper management of foreign assets represents a key compliance requirement.

In particular:

▪ foreign financial and non-financial assets must be reported for monitoring purposes pursuant to Article 4 of Decree-Law No. 167 of 28 June 1990 (converted into Law No. 227/1990);

▪ such assets may be subject to Italian wealth taxes:– IVIE for foreign real estate – IVAFE for financial assets held abroad;

▪ failure to report or incorrect reporting may trigger administrative penalties, although voluntary correction may be possible through voluntary disclosure (ravvedimento operoso) under Article 13 of Legislative Decree No. 472 of 18 December 1997.

Within the 730/pre-filled tax return, certain information may be reported in Form W. However, for the ordinary personal income tax return (Modello Redditi Persone Fisiche), the central reporting section remains Form RW, also for calculating IVIE and IVAFE.

8 Crypto-Assets: 2026 Impact (classification, tax rates and monitoring)

For AIRE taxpayers who become tax resident in Italy, as well as new residents holding crypto-asset portfolios, the regulatory framework combines tax rules, reporting obligations and traceability requirements that are constantly evolving. Italian law now explicitly recognises the tax relevance of crypto-assets, classifying gains and related income as "other income" under Article 67(1)(c-sexies) of the TUIR, while administrative practice of the Agenzia delle Entrate provides operational guidance.

Key developments for 2026 include:

▪ Tax rates and determination of the taxable base: taxation of gains requires detailed reconstruction of acquisition costs, transaction values and exchanges, particularly in light of the increase in tax rates from 1 January 2026 introduced by Law No. 207 of 30 December 2024.

Main rules include:

▪ 33% standard rate: applicable to Bitcoin, Ethereum, NFTs and other altcoins, increased from the previous 26% rate.

▪ 26% preferential rate: applicable only to Euro-denominated Electronic Money Tokens (EMT) compliant with the European MiCAR Regulation (e.g. EURC).

▪ Removal of the €2,000 exemption threshold: from 2026 all gains, even minimal ones, must be declared.

▪ Crypto-to-crypto exchanges: taxable only when assets do not share the same characteristics or functions; conversion into stablecoins or fiat currency generally triggers taxation.

▪ Fiscal Monitoring: The obligation to report in the tax return for monitoring purposes (RW/W schedule, depending on the declaration model used) must be managed with particular rigor, especially when crypto-assets are held through foreign intermediaries, non-resident platforms, or custody systems that complicate documentary evidence (wallets, digital accounts, etc.). Italian Revenue Agency (AdE) Circular No. 30/E of 27 October 2023 serves as the key reference for the application framework. The Revenue Agency will have direct access to information through automatic data exchange between exchanges (e.g., Coinbase, Binance) and the Italian tax administration, pursuant to the DAC8 directive. Failure to declare in the RW schedule will result in penalties ranging from 3% to 15% of the undeclared amounts.

▪ Impact on ISEE and Asset Disclosure: When a taxpayer (or household) applies for means-tested social benefits, crypto-assets may affect the calculation of movable assets for ISEE purposes. In this regard, the 2026 debate shows a strengthening of reporting obligations and operational implications (to be coordinated with DSU instructions and current administrative practice).

It is therefore important to consider that, for crypto-assets, compliance is not limited to "strict" fiscal matters (e.g., income tax purposes) but also includes declarative and asset-related aspects, with potentially significant effects in the event of audits and controls, as well as on certain indicators used to access specific benefits.

In particular, the holding of digital assets in cold wallets (e.g., hardware devices/USB keys) by individuals fiscally resident in Italy requires corresponding reporting in the RW schedule.

9. Inheritance and Gift Tax: "Change of Residence" Redefines Tax Territoriality (TUS – Legislative Decree No. 346/1990)

For individuals returning to Italy with significant assets held abroad, managing inheritance and gift tax is essential, as the territoriality criterion may change radically depending on the residence of the deceased/donor. The core provision is Article 2 of Legislative Decree No. 346 of 31 October 1990 (TUS), which – briefly:

▪ If, at the date of the opening of the succession or at the time of the gift, the deceased/donor is resident in Italy, tax is due on all transferred assets and rights, wherever located (the so-called "worldwide" criterion).

▪ If, instead, the deceased/donor is not resident, tax is due only on assets and rights "existing" within Italian territory, with qualification rules expressly detailed in Article 2 for specific categories of assets.

Operational Implications:

Returning to or consolidating tax residence in Italy can significantly affect the future taxation of gratuitous transfers involving foreign real estate, shareholdings, financial accounts, insurance policies, as well as segregated structures and foreign vehicles (e.g., trusts), for which the Italian Tax Authority explicitly emphasizes compliance with the territoriality criteria set out in Article 2 TUS when classifying transactions.

▪ Impact of Return: Establishing tax residence in Italy means that foreign bank accounts, foreign life insurance policies, and real estate located outside Italy will be included in the Italian estate or subject to gift tax. Italian tax applies to all assets, wherever located, resulting in worldwide taxation of assets.

▪ Foreign Tax Credit: To avoid double taxation, Italian law (Article 26 TUS) generally allows a credit for taxes paid abroad on foreign assets, up to the portion of Italian tax attributable to those assets. Careful planning is required, however, as the credit does not always fully offset taxes already paid abroad.

It is also important to highlight – from a risk management perspective – that the increasing flow of information through automatic exchange mechanisms (CRS/FATCA and cooperative channels) makes rigorous documentation essential, with detailed asset mapping and consistent reconstruction of ownership, beneficiaries, and asset location.

10. Conclusions: "Due Diligence" Approach (Tax and Registry)

The 2026 framework consolidates an overall attractive environment for AIRE registrants and new residents, although it requires a careful technical and substantive approach. Opportunities — including preferential tax regimes, real estate levers, and potential developments in healthcare — become truly accessible only when compliance and risk profiles are rigorously managed.

In particular, it is essential to ensure:

▪ the correct determination of tax residence under Article 2 of the TUIR and Article 43 of the Civil Code, coordinated with double taxation conventions and administrative practice (notably Agenzia delle Entrate Circular No. 20/E/2024);

▪ the management of Italian-source income according to the territoriality criteria set out in Article 23 TUIR;

▪ compliance with foreign asset monitoring obligations and wealth taxes (Legislative Decree 167/1990; RW/W; IVIE/IVAFE);

▪ correct classification and reporting of crypto-assets;

▪ planning and coordination of wealth effects, including in the context of inheritance and gifts (Legislative Decree No. 346/1990).

At the same time, caution is required when dealing with measures not yet definitively finalized (AIRE healthcare for non-EU/non-EFTA residents; IMU/registration tax relief for small municipalities), clearly distinguishing between current law and legislative prospects.

Disclaimer

The information above is provided for informational purposes only and does not constitute legal or tax advice or a professional opinion. Analyses and assessments concerning tax residence, asset classification, foreign structures (trusts, vehicles, insurance policies), regime eligibility, real estate acquisitions, AIRE/SSN compliance, and similar matters require case-by-case evaluation by a qualified professional.

For operational decisions, it is necessary to consult a competent and qualified professional (such as a chartered accountant or tax lawyer) in light of the specific circumstances.

At PHC Advisory, we can offer you full support on matters regarding doing business in China, or any other issues your business may face. If you would like to know more about policies relevant to your business in Italy or Asia, please contact us at info@phcadvisory.com.  

PHC Advisory is a company of  DP Group: an international professional services conglomerate of companies with approximately 100 experienced professionals worldwide. We offer comprehensive services in tax, accounting, and financial consulting, including financial supervision, financial audit, internal audit, internal control over financial reporting, and support for audited financial statements and annual audits, ensuring clients' financial transparency and compliance. 

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The content of this article is provided for informational purposes only, financial advice must be tailored to the specific circumstances on a case-by-case basis, and the contents of this article do not legally bind PHC Advisory with the reader in any way. 

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