Italy’s “Ronaldo Rule”: How the New-Resident Flat Tax Really Works (and Who Should Consider It)

• How does the Ronaldo Rule differ for athletes versus investors?
• What are the financial implications of Italy’s 2024 tax increases?
• How do I determine if my income counts as foreign-sourced?

Italy’s so-called “Ronaldo Rule” refers to the new-resident flat tax introduced in 2017 to attract high-net-worth individuals (HNWIs). Under this regime, foreign-sourced income is taxed at a fixed annual amount, rather than at progressive rates. Cristiano Ronaldo’s 2018 move to Juventus made the rule famous, as it allowed him to cap tax on his non-Italian income with a single yearly payment.

How it works (core mechanics)

Scope: applies to foreign-source income once you have transferred your tax residence to Italy. Italian-source income remains taxed under ordinary rules.
Fixed levy: originally €100,000 per year for the principal taxpayer, with an additional amount per family member. In August 2024, Italy doubled the principal levy for new applicants to €200,000 (existing beneficiaries kept €100,000).
Further increase: policy discussions and press coverage indicate a rise to €300,000 from 2026 for new entrants, alongside a higher add-on for family members. Treat this as a moving target to verify at engagement.
Duration & flexibility: the option can be used for up to 15 years (with the ability to opt out), but once elected it shapes the entire tax-planning strategy—including inheritance, gifting and exit scenarios.

Why athletes (and other HNWIs) care

For international athletes and entertainers, significant revenue streams (e.g., image rights, endorsements performed/paid from abroad) can fall under foreign-source rules, which is why the regime drew global attention in sport. For employment income earned in Italy, other frameworks (e.g., the “impatriati” regime) may apply; the 2019 Decreto Crescita extended inbound-worker relief to professional athletes with specific conditions. In practice, elite profiles often model both regimes before committing.

2024–2026: what actually changed

From Aug 2024: new applicants face a €200k flat tax; grandfathering preserves €100k for those already in. Expect closer policy scrutiny and periodic recalibration.
Toward 2026: several outlets report a planned hike to €300k (and family add-on increases) for future applicants. If timing is flexible, entry date may materially affect lifetime cost.

Who should (and shouldn’t) consider it
A good fit if you:

have substantial foreign-source income (investments, dividends, capital gains, royalties, global endorsements);
plan to relocate your tax residence to Italy for lifestyle/business reasons;
want cost certainty over a 10–15-year horizon, accepting a fixed bill rather than progressive rates.

Probably not ideal if you:

derive most income from Italy (employment, Italian operating companies, local real estate yields);
won’t meet residency requirements or foresee frequent status changes;
expect to rely heavily on treaty benefits that don’t align with a flat-tax framework.

Capitalio’s pragmatic checklist

Source mapping: split your income into Italian vs. foreign streams; test multiple scenarios (flat tax vs. ordinary taxation vs. impatriati).
Timing & grandfathering: model entry dates (pre/post changes) and family-member add-ons to minimise lifetime cost.
Holding & SPV design: determine whether a UK holding and/or Italian SPV improves control of Italian-source income that remains outside the flat tax.
Estate planning: align the election with inheritance and gift-tax strategies; consider domicile implications early.
Exit logic: define conditions for opting out or switching regimes if your income mix becomes predominantly Italian.

Bottom line
The “Ronaldo Rule” can be compelling for globally diversified earners who want to live in Italy without exposing their foreign-source income to progressive taxation. But it’s not a blanket discount: what you earn in Italy remains fully relevant, and recent policy changes make timing and structuring decisive. Capitalio helps clients evaluate eligibility, compare regimes, and design the corporate and personal pathways that keep lifestyle and after-tax returns aligned

For tailored guidance on residency, structuring and acquisitions, Contact Capitalio