Brain Return Italy: A New Tax Incentive for Skilled Professionals

Italy has long faced a challenge of brain drain, with many of its top talents choosing to live and work abroad for better opportunities. However, the tide seems to be turning. In recent years, Italy has introduced several initiatives to encourage skilled professionals to return to the country. One of the most significant incentives is the “Brain Return” tax benefit, aimed at attracting talented individuals, both Italians and foreigners, to bring their expertise and innovation back to Italy. Here’s everything you need to know about this new tax incentive.

What Is the Brain Return Tax Incentive?

The “Brain Return” Act is a tax incentive introduced by the Italian government to reverse the trend of skilled professionals leaving the country. The goal is to attract those with high-level skills, qualifications, and specializations to return to Italy and contribute to its technological, scientific, and cultural development.

While this incentive is mainly targeted at Italians who have worked abroad, the good news is that foreigners—such as digital nomads or those with dual citizenship—are also eligible for the benefit. This makes the program attractive to a wider range of professionals looking to relocate to Italy.

How Does the Brain Return Tax Incentive Work?

The tax benefit applies to those who relocate their tax residency to Italy for more than 183 days in a year, starting from 2020. To qualify, applicants must not have been residents of Italy in the previous two tax years and must commit to living in Italy for at least two years.

Once qualified, workers—whether employees or self-employed—can enjoy an exemption on 70% of their income. This means that only 30% of their income is subject to taxes, which significantly reduces their overall tax burden.

If a person sets up a business in Italy starting from 2020, they are also eligible for this tax benefit.

Duration and Extensions of the Tax Benefit

The tax benefit begins in the year you relocate to Italy and lasts for four years. However, under certain conditions, the benefit can be extended. If you bring dependents with you or purchase property in Italy, the benefit can be extended for an additional five years, but at a reduced tax exemption rate of 50%.

For those relocating to southern regions of Italy, including Sicily, Calabria, Puglia, and others, the income exemption can rise to 90%, making it an even more attractive option.

Eligibility for Italian Citizens

The tax benefit also applies to Italian citizens who are not registered in AIRE (the Register of Italians Resident Abroad). To qualify, these individuals must have lived in another country for the two years preceding their move to Italy, and that country must have a double tax agreement with Italy.

Special Scheme for Researchers and University Teachers

In addition to the general incentive, there is a separate scheme for university teachers and researchers who relocate to Italy. To qualify for this special benefit, they must have worked in educational institutions or universities abroad for at least two years and must become tax residents of Italy.

Under this scheme, 90% of the income earned from their activities in Italy is exempt from taxes. The tax benefit lasts for five years, with potential extensions up to twelve years if the researcher or teacher has children under 18 or has purchased residential property in Italy.

How the Brain Return Incentive Supports Research and Innovation

The Brain Return initiative is designed not only to bring back Italians who have worked abroad but also to attract foreigners, particularly those with expertise in research and academia. By offering substantial tax breaks to teachers, researchers, and high-skilled workers, Italy aims to foster growth in research and technological development, making the country a more competitive player in the global market.

Conclusion: A Great Opportunity for Skilled Professionals

The Brain Return Act is a strategic move by the Italian government to boost its economy and innovation sector by attracting top-tier talent. Whether you are an Italian citizen, a digital nomad, or a researcher, the tax incentives offered by this program can make relocating to Italy an appealing prospect.

If you qualify, you could enjoy significant tax savings, paying only 30% of your income tax or, in some cases, as little as 10% of your income. Additionally, relocating to southern Italy with your family and purchasing property could allow you to extend the benefits for up to ten years.

For anyone looking to take advantage of this program, now may be the perfect time to make Italy your home.