The Largo Camp is united against the Scrooge McDuck catcher rule. But the data says that the attraction for millionaires guarantees billions in revenue.
They don’t agree on anything or almost nothing but when it comes to taxes or the possibility of eliminating some tax breaks they unite like one man. They are the forces of Wide fieldprogressive or self-styled, who on rearmament, Ukraine, support for the EU are divided into streams of a thousand distinctions, while they have started an all-out battle against the flat tax from 300 thousand euros for “new residents” in Italy, the so-called norm catches Scrooge McDuck. The regime introduced by the Renzi government in 2017, the former prime minister who was also active in the Democratic Party at the time. «It is not accepted that those with millionaire incomes pay less tax than an employee or a pensioner» could be summarized in this way the positions of the Dem, M5s and Avs on the flat tax.
Statements that at first reading are flawless. But then, as often happens when it comes to Schlein, Conte, Bonelli and Fratoianni, if ideology is replaced by substance, the judgment is overturned.
The tax mechanism that attracts foreign millionaires to Italy
So let’s try to understand. Italy hasn’t invented anything because the preferential tax regime to attract managers, entrepreneurs, finance men but also footballers, actors and influencers is in force for example in Portugal, Greece, Spain, Ireland. Renzi borrowed the system to attract potential big “spenders” with an annual tax of 100 thousand euros – which later became 200 and then 300 thousand under the Meloni government – on income produced abroad.
To these must be added 25 thousand euros (now doubled to 50 thousand) for each dependent family member and that’s it. A nice saving compared to the normal rates of the Bel Paese. Also because the one-off payment replaces all taxes on foreign income (dividends, interest, capital gains, real estate gains, etc.). All you need to do is not have been tax resident in Italy for at least 9 of the 10 years prior to the transfer and submit a request toRevenue Agency. Simple system, which despite the “increases” attracts more and more millionaires, especially from the United Kingdom.
The numbers of the exodus from London and the value for the Italian economy
According to a recent report by Assonimelast year there were 2,500 beneficiaries of the flat tax to catch Scrooge McDuck, and of these 40% came from London and the surrounding area. Then of course, former residents in France, Brazil, the United States and Switzerland also stand out, but the abolition of the English non-dom regime, which made foreign income taxable even for those living across the Channel, pushed many managers and businessmen to leave Great Britain to come to us.
It’s called tax competition. A competition from which Milan (52%) and Rome (17%) especially benefited and which is worth around 5.3 billion euros for Italy. It has everything inside: real estate and financial investments (several family offices have been created), consumption of exclusive and collectible products, as well as the demand for high-level services. Then, of course, tax regulations are constantly evolving, but the study highlights that continuing at this rate, the exodus towards the Bel Paese should bring us around 7 thousand new nabobs who would guarantee revenues of 38.4 billion euros by 2040. How? Just to give a number, thanks to real estate, one new resident in two has purchased at least one property (average price just under 4 million), for a total value, between 2017 and 2025, of over 4 billion.
And to these must be added the taxes paid on sales, IMU payments, VAT for renovations, etc. «From my experience», he tells Panorama Alessandro Borsettopartner and head of tax advisory in Lexiawhich followed dozens of customers who took advantage of the flat tax, «these are people with a very high spending attitude. Everything is top notch: from restaurants, to the purchase of clothing, from professional services to cars, up to the rental of holiday homes, the selection of a personal trainer and the choice of private school for the children. Precisely for this reason I think that the turnover guaranteed by those attracted by advantageous taxation is well above the 5 billion that Assonime talks about”.
Between advantages for the State and presumed effects on the real estate market
Moreover, this type of benefit, more than for those who come to Italy to work, works perfectly for entrepreneurs and businessmen who hold shares in foreign companies and entities or are members of the board of foreign groups, who collect their huge incomes by exclusively discounting the flat tax, and have all the time and economic availability to enjoy extra luxury services and goods. «Not infrequently», continues Borsetto, «it happens that an entrepreneur transfers his tax residence to Italy and quickly decides to sell his company abroad. Reason? In this way he pays only 300 thousand euros on the often millionaire qualified capital gain. Pay attention to what the law requires, however. Anyone who carries out the operation in the first five tax periods of validity of the facilitated regime is not entitled to the “tax discount”. However, following a request, the Revenue Agency can still grant the benefit subject to confirmation that the applicant will remain in Italy for at least 5 years following the year of exit. For Italy, in fact, beyond subjective evaluations” continues Lexia’s partner, “it is a win-win situation. Without advantageous taxation these people would never have come to live in the Bel Paese.”
There are few doubts about the win-win for state revenues, some more doubts arise from the distortions that are inevitably created, for example in the real estate market, due to the massive arrival of dozens of “High Spenders” in the same city. Milan and Rome above all.
It is another of the workhorses of the left that points the finger at the sudden surge in house prices, to the detriment of the middle class. «I don’t deny that there may be a slight drag effect on the real estate market», explains Borsetto, «but it is a phenomenon due more to the excess of demand over supply and the related speculation. We are talking, as mentioned, about millionaires who choose exclusive contexts where they often purchase properties for 20-25 thousand euros per square meter. I don’t believe that all this, after all the number of transactions is very limited compared to the overall number, can directly influence the housing market valued at 20% of those figures. Rather, it seems to me that a bit of political propaganda is being carried out towards this regime, which was introduced by a centre-left government, but the advantages of the “lump sum tax” (flat tax, ed.) are decidedly superior to some marginal imbalances, which however remain to be verified”.
