A French national moving to Italy

To cease being treated as a French tax resident, the taxpayer must in particular move to Italy:

• their family home;
• their habitual place of stay;
• their main professional activity;
• the centre of their personal and economic interests.

If France and Italy both treat the person as resident, the France-Italy tax treaty settles residence using successive criteria:

• the permanent home;
• the centre of vital interests;
• the habitual abode;
• nationality;
• then, if necessary, an agreement between the tax authorities.

The departure must therefore be documented, in particular through the Italian home, the family’s move, the children’s schooling, the exercise of the activity and the place where decisions on the assets are taken.

Outside any special regime, an Italian tax resident is, as a rule, taxed in Italy on their worldwide income.

This may in particular concern:

• remuneration;
• dividends and interest;
• capital gains on securities;
• real estate income;
• income from a holding company or foreign companies.

Investments held outside Italy must also be reported. The Italian framework provides in particular for:

• IVIE on real estate located outside Italy;
• IVAFE on certain foreign accounts and financial products;
• reporting of foreign assets in the quadro RW.

Before departure, the bank accounts, portfolios, life insurance policies, shareholdings, trusts and real estate held in France or in other countries should therefore be mapped.

A taxpayer moving their tax residence to Italy may, subject to conditions, opt for the regime under article 24-bis of the TUIR if they have not been tax resident in Italy for at least nine of the previous ten years.

For persons moving their tax residence to Italy from 1 January 2026, the annual flat tax on foreign income is now set at:

• €300,000 per year for the principal taxpayer;
• €50,000 per year for each family member to whom the option is extended.

This amount replaces the €200,000 flat tax applicable to certain earlier moves. Whether the regime is worthwhile therefore depends heavily on the amount and nature of the foreign income.

Italian-source income remains subject to the ordinary Italian tax regime.

The taxpayer may also exclude certain States from the flat tax regime. Income from those States is then taxed under ordinary Italian law, which may in particular allow the corresponding foreign tax credits to be used. The option and the excluded States are stated in the Italian tax return. A request for an advance ruling may also be submitted to the Italian tax authorities.

Capital gains realised on certain substantial foreign shareholdings during the first five tax periods of the regime remain excluded from the flat tax and subject to ordinary Italian taxation.

This point is particularly important for an entrepreneur who plans to sell soon after the move:

• the shares must be analysed before departure;
• the date of sale must be planned;
• the characterisation of the shareholding must be checked;
• the Italian cost must be compared with the French exit tax;
• the company sold must be correctly located under the source rules.

After the effective change of residence, the taxpayer may still be taxed in France on certain French income and assets, in particular:

• income and capital gains from property located in France;
• certain remuneration relating to an activity carried on in France;
• dividends from French companies, subject to the treaty withholding tax;
• certain capital gains on French shareholdings;
• pensions, depending on their nature and the treaty rules.

Real estate income in particular remains taxable in the State where the property is located. Italy, as the State of residence, may also take it into account under its domestic law, with the treaty mechanism for eliminating double taxation applying.

Moving to Italy may trigger the French exit tax if the taxpayer:

• has been tax resident in France for at least six of the ten years preceding departure;
• and holds shares representing at least 50% of a company’s profits or with an aggregate value exceeding €800,000.

The exit tax concerns in particular unrealised capital gains on shares, earn-out receivables and certain capital gains already under deferral, in particular under article 150-0 B ter of the French Tax Code (CGI).

As Italy is a member of the European Union, the move as a rule gives entitlement to an automatic deferral of payment. The reporting obligations and subsequent events affecting the shares must nevertheless be tracked.

Once no longer tax resident in France, the taxpayer remains, as a rule, liable to the French real estate wealth tax (IFI) only on their real estate located in France, held directly or indirectly, where its net taxable value exceeds €1.3 million.

In Italy, holding foreign real estate may normally give rise to IVIE. The treatment under the flat tax regime for new residents must be confirmed with Italian advisers in light of the option actually exercised.

France and Italy have concluded a specific treaty covering both successions and gifts. It allocates taxing rights according to the residence of the donor or the deceased and the nature of the assets transferred.

Under the Italian regime for new residents, the internal work identifies a specific treatment of foreign assets for gift and succession purposes. It does, however, highlight an important question: entitlement to the French tax treaties must be examined with caution where the taxpayer is subject in Italy to a flat tax regime that does not treat foreign assets in the same way as the ordinary Italian regime.

The following must in particular be analysed:

• the residence of the donor or the deceased;
• the residence of the children and heirs;
• the location of real estate and financial assets;
• shares in French companies;
• gifts made before departure;
• the period during which the Italian regime applies;
• the interaction between the Italian flat tax and the France-Italy treaty.