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Refusal of 70-90% Income Exclusive in Italy, What Netx?

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there is and I will find it. I dont mind paying‍ taxes but I will not pay 43% either.

okay, thanks for the suggestion⁣

Buddy, nobody screwed up the paperwork, apparently the law is not that clear and straightforward. They︃ want you to show that you moved to Italy "only" to make use of the︄ exemption. I have clarified with one of the best tax advisors in Italy. Unfortunately, my︅ intention was not to use the exemption but to develop my product for commercialization which︆ took me 4 years and now unfortunately I cannot use the exemption.

I agree, I have lived in︈ Asia, seen africa and now live in europe. People have become oblivious of the liberties︉ they enjoy in europe and how the general population and politics is much better than︊ anywhere else on the planet. But, everybody has an opinion of their own which is︋ good.
 
Then you‌ have nothing to whine about.

Move to⁠ Malta and use a resident non-domiciled company.

"Companies which are resident but not⁤ domiciled (or vice versa) in Malta are subject to tax in Malta on all income⁣ and chargeable gains arising in Malta, and on income arising outside Malta which is remitted⁢ back to Malta. No tax is payable on foreign income which is not received in︀ Malta and on capital gains arising outside Malta to a company which is not ordinarily︁ resident and domiciled in Malta, even if remitted to Malta."

It's a much simpler︂ setup than having an operating company in Malta (good luck in opening a bank account︃ for that company BTW) plus a holding.
 
thanks for taking the time to answer. Well, I︂ have the right to whine cuz its not well written law and can lead to︃ abuse by the authorities or favouritism on who can and cannot get it. Malta is︄ my second preference and I am seriously considering it. Thanks
 
Its easy‍ to see negativity but what do you think is a good choice for a westerner,⁠ that you would recommend?
 
The Caribbean, Central America,‍ most of South America, most of the Pacific, most of Africa, most of Asia, a⁠ sailboat. There are so many places where you pay little to no taxes and can⁤ do your thing without being bothered.
 
So far fingers crossed we still find Georgia is okay as a place‍ to locate a tech software business, but we watch the trends very very carefully and⁠ have lots of experience to draw on to try and manage any changes that might⁤ occur. We pay tax and probably more than we could - but safe to pay⁣ a bit more and avoid any tightening noose than pay less and get flagged. However,⁢ seems you also want a great place to raise your children - and you are︀ happy with UK climate - and you are looking at the old model of {Malta︁ - UK non-dom + Italy (your current country) + one other}... and you are hoping︂ this structure stays low tax for some years ahead. (Nobody can promise it will. If︃ you want non-dom with less risks of it being abolished then Ireland and IoM are︄ not making any noises about abolishing theirs.) In other threads there is discussion about keeping︅ your structure simple to avoid too many variables that can bring your plans undone.

The idea of living in a nice boat is not new and many people do it︆ 🙂. ... including my brother did it with his family. But these days - when︇ there is potentially a _lot_ of tax dollars up for grabs - more countries will︈ want to ask about your tax residency unlike the good old days when boat people︉ could just float around in very low tax or even income tax free bliss. Boat︊ people were amongst the first 'digital nomads'. Everything is a compromise eh 🙂.

By IoM︋ I mean capped maximum income tax - not non-dom.

I tend to agree with
Yep. As JohnnyDee has also said... your children will usually thank you for providing them an︎ international upbringing that exposes them to the realities of life more than an upbringing in️ a safe place in one high end country that might produce closed minds. There is‌ so much more to life... and exposure to foreign cultures is how it's absorbed.. balanced‍ by how you provide stability for the family / partner / kids, as some kids⁠ thrive on adventure and others hate change. Like all of this discussion, it all depends⁤ on the fine detail specifics of your own personal circumstances and usually advice can only⁣ be generalised.

What is your original country of citizenship? What languages do you and your⁢ family speak? Does that open any doors or simplify any choices for you?
When considering︀ non-EU countries, especially those that might appear to be outside your comfort zone, then check︁ if they might be able to fall into your personal comfort zone. (by yours I︂ mean you family's.) For example, do they have large expat communities speaking your language that︃ can ease your pathway into that country and culture? Do they have international schools etc︄ etc (or is home schooling your thing)? It's all the usual relation questions / subjects.︅

Better to throw the net wide but definitely do explore countries that are not already︆ flagged for harsher tax treatment by the countries you will be sourcing money from. Meaning︇ it will be longer before the trend of higher taxes locally or internationally hit those︈ unflagged countries.

A country can be unflagged for all kinds of reasons. For example, the︉ USA has the political strength to get away with lots. Bulgaria has reducing population (especially︊ of young people) and other issues, so the EU will probably allow Bulgaria to stay︋ low tax for some years ahead. In this regards I will mention Georgia again... not︌ everyone's choice at all, but outside the EU and it is still _off_ everyones grey︍ list and is not considered by any tax authority to be running a zero tax︎ or similar haven. From this "not flagged countries" perspective, georgia is an example of the️ type of country worth a closer look. If you really want to be close to‌ the EU then Georgia is fairly close... again, it's all about your preferences and balancing‍ them for the best compromise result.

And finally remember some countries will no longer give⁠ certain tax advantages (like Malaysia and tax free foreign dividends) if the source funds were⁤ not already taxed at least a certain amount - can be 15% for some countries,⁣ other countries say "if not taxed at similar rates as we tax that type of⁢ income". It's the fine details of your money flows that need to be studied and︀ harsher taxation generally is the trend. So best to keep it in mind and try︁ to start with countries and structures that at least currently are not flagged at all︂ (Malta is certainly flagged but still probably an okay choice for a few years to︃ build wealth and then jump to somewhere else) - and Georgia's also probably okay for︄ a few years to build wealth if done carefully - and so are various other︅ countries in the regions JohnnyDee suggested.
Avoid if possible using special status in countries already︆ under risk of known local or international political and tax pressure to change (such as︇ UK non-dom ). Needing to change countries after a few years by choice is better︈ than jumping because the tax man is chasing or about to come knocking on your︉ door. 🙂 . Avoid thinking you can choose one low tax place now and it will︊ still be your low tax home for the next 20 years. I aq, keeping an︋ eye on this thread because it's a very common situation - a person or family︌ on the verge of making their financial breakthrough and how to make trend savvy choices︍ to maximise the benefits.
 
Thankyou for taking the time to share your︋ views and experience. I know people who have used the dutch sandwich and it worked︌ pretty well. Apparently I like the holding company using the participation exemption and keeping the︍ gains or distributing dividends. I am keen to go to malta also cuz of the︎ close proximity but I dont like islands, I come from a very big city unlike️ my wife. After speaking to lawyers there I think the regime is pretty good and‌ clean, maybe the EU might not let it be for a long time, but at‍ the moment it works. SO, I and my wife will be moving as having a⁠ shareholdoing along with 2 other partners in the operating company in malta and our shareholding⁤ will be in a holding company in either cyprus, gibralter or estonia which will own⁣ our share in the operating company, the maltese company will then pay 35% tax and⁢ refund request will be asked by the holding company in either of the 3 places︀ and the gains will be sent back to me in malta tax free. Yes, malta︁ will issue a tax certificate of 35% tax paid and will not question if I︂ bring that money back to malta thru my holding company. Again, me and my wife︃ will build substance for sure, this is pretty clear and verified by a lawyer. NOW,︄ I am not a fan of malta and how small it is but it definitely︅ has a lot of advantages since I can see my business partner in the morning︆ and take a flight and be back by night. Now, for my children I think︇ UK will be better from an education standpoint (me and my wife speak english at︈ home and a bit of italian) but they turn 1 in february so I have︉ another 2-3 years where they go to a proper school. Again, malta non doms have︊ to pay a minimum of 5k euros in tax if you make 35k euros or︋ more, which is not bad.

As far as substance is concerned, I just have 1︌ business partner in Italy and R&D, one partner is in Asia and I will be︍ out of italy along with my wife too. Again, I spoke to a very experienced︎ tax attorney in Italy and I was told its better to exit Italy thru malta️ or UK and then maybe leave europe completely cuz these big high tax countries dont‌ like if you leave the EU completely and go to a place like dubai/ bahamas‍ etc which have 0 tax and open cases against you to pay or consider you⁠ as a tax resident for 4-5 years. I am already paying a pension to myself⁤ without my company making any profits, thats the reality.

I am 34 and a father⁣ of 2 and really worried for my kids and sometimes dont sleep overthinking about their⁢ future, which is common for my generation. Thankyou for sharing your views.
 
Interesting. I was looking to use this exemption in a few years⁢ and already talked to an Italian lawyer. So to use the exemption, you would need︀ to move to Italy, apply right away and not do anything else?
 
I do agree anywhere is better than Europe if you value liberty and‍ don't want the government interfere all the time in your life with having for everything⁠ a rule and taxation.

Even living in China you felt more free before..although those times⁤ have changed.

It's a personal matter and Europe definitely has a lot of nice things⁣ to offer, if you don't mind the interference in jour life by the government and⁢ if you follow the herd accepting that you should work half of your life full︀ time to pay autorities that make some more ridiculous rules and chase you for any︁ rule you don't follow.

Most people don't realize this and are happy with their lives︂ in Europe. Once you realize that it is not normal that the government dictates you︃ on every aspect in life what to do and you have to give away 2/3rds︄ (tax+social security+vat) of your earnings to them, you get a different view on Europe.
 
Switzerland would be a good place to consider, especially for an Italian. Easy to incorporate‌ etc. I'm around Zug, the lowest tax canton, can support in a variety of ways‍ if you want to explore
 
So you are italian and thought it was a good︎ idea to open a company in Italy?Everybody is fleeing from Italy, and I mean the️ big companies ( Exor, Campari, they are all dutch companies ) but there is still‌ people who think that it's a good idea to open a company in italy and‍ don't get fucked. you are not alone, I have friends which are in similar situation.⁠
I think that Italy is exactly the last country where I would grow up my⁤ children, if I had any, but that's a different thing, from a fiscal point of⁣ view, there is little info about what this is about.
I mean there are two⁢ separate parts, which is your personal income and the company income: if you move yourself︀ out of italy, but all the rest remains in italy, so you have no substance︁ outside of italy, for tax purposes I think that the tax authority could consider the︂ company an Italian company. It depends from a lot of factors, but if you have︃ 1 people of the company in Cyprus and 20 in Italy, it's difficult to say︄ that this is a Cyprus company.
same applies for tax purposes, if you are resident︅ in Cyprus or Malta or Dubai, you can't be in Italy for more than 183︆ days. But also you can't have the princpal place of your business interests in Italy︇ either, so to make this look believable, you would have to move most of the︈ company outside of italy, have substance somewhere else.
The biggest problem is that the tax︉ authority is watching you, since you applied and where refused, so every move you make︊ will be scrutinized, you are an italian, you know the rules, you should be like︋ a ghost, the longer, the better.
So I think you should get professional advice, there︌ are too many variables, and I am not a professional, but your situation looks complicate.︍ At the end of the day it all depends on how much money you are︎ going to do, how it's structured....
I have friends about your age who did millions️ working for an Italian company and making money in shares, and they only paid 11%‌ as the company was not a public company and they used a 11% tax for‍ partecipations ( Rivalutazione partecipazioni e terreni 2021, proroga per il versamento dell’imposta sostitutiva. )⁠ but not sure how long it will last
 
no thanks, i will stick to italy rather.‌

no, you should get a rulling from the guardia di finanza (tax authority of italy) before⁤ moving or simultaneously. Please do that before.

or agenzia︀ entrate, please speak to a good commercialista in milano. avoid all other regions when it︁ comes to these things in italy.

or agenzia entrate,︄ please speak to a good commercialista in milano. avoid all other regions when it comes︅ to these things.
Thankyou for taking the︋ time to share your view, well I did not have any other option than forming︌ the R & D company in italy due to my business partners. I have spoken︍ to one of the best lawyers in Italy and they have suggested dutch holding company︎ to own the production company in italy and claim participation exemption when we sell the️ company which would take another 4-5 years maybe but not less than 3 for sure.‌ I will have to move out of italy with my wife and kids very soon‍ before I form the dutch holding. I am mostly moving to malta, its close and⁠ very very tax friendly plus cost of living is not out of the roof like⁤ switzerland and dubai, I am sure i will be able to make and keep some⁣ cash with me. The problem with good lawyers is that they offered me another new⁢ option, I can claim 90% income exemption as a researcher for 11 or 13 years︀ if I have 2 minor kids which I do and an R and D company︁ which I also do, it depends on me but still capital gains will be taxed︂ at 26%. And btw, I am not italian ( I might take the italian passport︃ thru my wife who is italian) but thats it. I am of asian descent. lets︄ not get in to those details as its irrelevant. But yes, I am standing out︅ too much in Italy which I dont like.

good option but cost of living is ridiculous in switzerland. I would︉ use their banking for sure.

I think europe still is best overall⁢ for a lot of things than 1, I can criticise almost any country in the︀ world, no place is perfect. Yes taxes are high but you will not find a︁ more civilised place in the world with high quality of life and less poverty.
 
Europe has some very⁤ good implementation of Welfare state, but that doesn't apply to Italy, where nothing works. All⁣ the anglo saxon countries + France are good place to live if you like a⁢ working welfare state. Spain is so and so but it's much better than Italy, and︀ Italy and Greece are where you go to f**k the system. At the end of︁ the day I totally agree with you that no place is perfect, you just have︂ to understand what each country has to offer and what are the trade offs. I︃ don't want kids, I don't believe in welfare, I don't believe that justice is fair,︄ so I live in Dubai, and just go to europe as a tourist.
Anyway, back︅ to topic, the last offer didn't sound so bad, 26% on capital gain is not︆ unreasonable. At the end of the day, look at what remains in your pocket and︇ not at what you are leaving on the table. If you bring home 3 or︈ 30 millions and leave 1 or 10 on the table, at the end is not︉ so bad. I mean, beside the money, take into consideration where would you want to︊ live long term and grow your kids. If for some strange reason that I can't︋ understand, the answer is Italy, that deal is not so bad.
 
how much are we talking⁠ in terms of corporate and personal tax? and capital gains?

no I am not thinking of being in italy long term, I have achieved what︌ I wanted to achieve in Italy and now is the time to exit for me︍ i think. I am looking at making around 5m-8m euros approx in cap gains and︎ 26% is quite high considering my expenses are 50k a year all inclusive, its like️ 20 years of expenses gone in taxes for me if I end up making 5mil.‌
 
Hi! I'm Italian and currently living in Cyprus as a non-dom. I own a small‌ online business and the set-up is pretty simple with an LTD company incorporated here.
Taxes: 12,5% on profits, 0% on dividends plus 2,65% social insurance. If you have to pay‍ yourself a small salary you enjoy a no-tax area up to 19,5K (you will pay⁠ social contributions though, a bit over 30% but the minimum salary is 500 Euro, so...).⁤
There are good international schools, good food and the weather is lovely throughout the year.⁣ Decent and inexpensive health care too cause there are plenty of retired people who moved⁢ here from northern Europe.
I am in Paphos area and there are direct flights to︀ anywhere in Italy March to October, to BGY and FCO during the "winter". It's a︁ Ryanair 3 hours flight, cheap and effective.
The non-dom status requires that you have a︂ place to live available all year round and spend at least 60 calendar days a︃ year on the island. It lasts for 17 years and you can pause it should︄ you move out of Cyprus and resume it once you are back.

I'd say this︅ solution meets most of your requirements. Depending on where you decide to live you'll find︆ city life, country life, beach life... there's a bit of everything and it's not a︇ huge shock for someone used to living in Italy. Everything is close and you drive︈ from one end of the island to the other in less than 3 hours.
The cost of living varies a lot, Limassol can get pretty expensive, while anywhere a few︉ KM out of any city is like the south of Italy.
In my area, you︊ could rent a modern 3 bed 2 bath villa with a private pool for 1.500-2.000︋ Euro, a decent 2 bed flat in a complex for 800-1.000... now many Russians are︌ flowing in and long term rentals are going up, but it's still affordable.
As you︍ would expect in a small island, locals are sometimes not exactly modern and open-minded, but︎ there's a large international community. And very few Italians, which I personally like.
Well, get️ in touch if you want to know more, I'll happily share my personal experience.

Cheers!
Ric
 
thanks for taking the time to share your experience⁠ about cyprus, well it looks pretty attractive, whats the catch? I am currently in malta⁤ and quite impressed by the weather and people, meeting some lawyers tomorrow to see if⁣ a structure can be worked out. My business will probably net 1m - 5m a⁢ year approx but my problem is capital gains, I am expecting roughly in the range︀ of 5-10m euros in 5 years. What are the conditions of non-dom in cyprus? In︁ malta there is a minimum 5k euros needed to be paid if above 35k euros︂ a year. What about banking in cyprus? I am hearing in malta its difficult again︃ the lawyers or accountants never give the correct picture or I will not take their︄ word for it. Is english the official language in cyprus? Is it more expensive than︅ malta? how does the social security contributions and 2.65% social insurance work? I am also︆ considering holland which allows participation exemption for holding companies and 5 year non resident status︇ with 30% exemption from income.
 
You can also check estonia-malta fiscal unit structure, with effective 5%︆ tax, and indefinite tax deferral. Adding Cyprus or UAE holding in the mix would probably︇ not hurt either. Perhaps you dont need EU structure at all?
Maybe keep personal tax︈ residency in Cyprus or UAE to avoid further tax on dividends, depending on where you︉ don't mind staying for minimum ~90 days/year.
 
considering cyprus as an option, I am⁣ avoiding UAE for now but I do have second residency there and a company. I⁢ dont want my kids to be exposed to UAE, holland offers a very good holding︀ company regime which I am seriously considering. Malta seems to be a good option but︁ their non dom comes with CFC and permanent establishment issues which I dont want.

I am meeting some more lawyers tomorrow and︆ will update with more useful information about malta, appreciate your inputs.
 
I didn't like Malta's atmosphere in general (personal opinion ofc),⁤ and most of all they don't offer the "minimum 60 days" option to be a⁣ non-dom resident if I well remember. But I didn't investigate a lot since I didn't⁢ want to settle there anyway.

As far as I know, capital gains are not︄ subject to any taxation for a non-dom in Cyprus, no limit. I am a much︅ smaller fish than you so I didn't look into the 6 digits range, but I︆ have never bumped into anything like a threshold when searching.

Well, personal experience: banks are SLOW. I managed to open with the Bank of︊ Cyprus in 4 weeks after sending them every imaginable document. They are ok but if︋ you end up classified as an "International Business" they will charge quite a lot. I︌ switched to Revolut which became available again months ago and it's fine for my small︍ transactions. I heard good things about Hellenic bank too.

It is, as a former British colony English is️ spoken everywhere from public offices to the kiosks selling their fruit and vegs

I was in Malta several times‍ only as a tourist so I can't compare. I can tell you that Cyprus' cost⁠ of living changes dramatically depending on where you want to be, as I said. Renting⁤ or buying property in Limassol can be more expensive than in Milano, while the countryside⁣ can be cheaper than any small village in Sicily. Cars are more expensive but insurance⁢ and property tax are way cheaper than in Italy. Gas is much cheaper (Petrol <1,4︀ Euro now), but... you don't really need a fancy car unless you especially like it.︁ It's fun to have a 4x4 cause you can drive anywhere no limits, and it's︂ fun exploring.
Local food is super cheap and often "Km 0", imported goods are more︃ expensive than back home.
Internet is very expensive both home and mobile but we are︄ used to super cheap prices in Italy. I am doing good with my Italian SIM︅ and the roaming because I am travelling back and forth all the time and my︆ fiber at home is included in the rental.
Don't expect anything like "Amazon Prime" though,︇ life runs slower... but personally I enjoy a much more relaxed lifestyle than in Moscow︈ where I used to live. I see this as an advantage.
If you are going︉ to make millions as you say, I wouldn't bother about the cost of living in︊ either Malta or Cyprus honestly.

You pay 2,65% (GESY) on both dividends and salary. This lets you use the local health︍ system which is not bad at all and rather inexpensive.
You pay social contributions (pension)︎ on salary only, that's why I gave myself the lowest possible salary and use the️ dividends whenever I need cash. You can extract dividends at any time during the year.‌
I found a good tax advisor too, they are an average-sized firm of approx 20‍ people, very competent and always available to help. Nice people I must say. But again⁠ my needs are quite basic, nothing fancy or problematic.
 
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