Relocating for Tax Efficiency: A Comparison of Spain, Dubai and Italy
For high-income professionals, entrepreneurs, and digital nomads, relocating abroad can bring significant tax advantages. Among the most attractive destinations for favourable tax treatment are Spain, Dubai and Italy. Each offers distinct incentives and fiscal regimes for foreign residents. In this article, we explore the key features of each countryâs tax system to help you assess which one may suit your financial goals best.
Spain: The Beckham Law for Foreign Professionals
Spainâs special expat tax regime, commonly known as the âBeckham Law,â was originally created to attract high-profile individuals such as footballers but is now used by a broader range of international professionals. It offers a flat tax rate of 24% on employment income up to âŹ600,000 per year. Any income above this threshold is taxed at 47%.
One of the regimeâs major advantages is that foreign-sourced income is generally not subject to Spanish tax, except for income from Spanish real estate or capital gains derived from local assets.
This tax status can be maintained for up to six years, which includes the year of arrival and five additional years. To qualify, the individual must not have been a Spanish tax resident during the previous five years and must relocate to Spain as a result of a job offer from a Spanish entity or through an international group transfer.
For high earners, the Beckham Law provides an opportunity to avoid Spainâs progressive income tax rates, which can surpass 50% in certain autonomous regions.
Dubai: The Zero Income Tax Destination
Dubai, part of the United Arab Emirates, is well known for its absence of personal income tax, making it a top choice for expatriates seeking maximum tax efficiency.
In Dubai, individuals do not pay tax on their salary, dividends, capital gains or interest income. Additionally, the country imposes a 9% corporate tax, but only on business profits exceeding AED 375,000 (approximately âŹ95,000). Furthermore, many businesses located in Dubaiâs free zones benefit from tax exemptions for extended periods.
The value-added tax (VAT) in Dubai is only 5%, making it one of the lowest globally.
Dubaiâs appeal lies in its tax neutrality: no direct income tax and business-friendly conditions create a highly attractive environment for professionals and investors alike.
Italy: Flat Tax and Impatriate Incentives
Italy has introduced favourable tax schemes to attract foreign residents and returning nationals with substantial income.
The flat tax regime allows new residents to pay a fixed âŹ100,000 annually on all foreign income, regardless of the total amount earned. This option is especially appealing for those with high earnings from abroad.
In addition, Italy offers the âImpatriate Regime,â which provides a 70% to 90% exemption on employment income generated in Italy, depending on the individualâs location and profession. This regime is designed to encourage highly skilled professionals to relocate to Italy.
The flat tax can be applied for up to 15 years, while the impatriate regime is generally available for five years, with possible extensions. To qualify for the flat tax, individuals must not have been tax residents in Italy for nine of the previous ten years. The impatriate regime requires two years of non-residency before moving to Italy.
Italy combines generous tax incentives with an attractive lifestyle and is becoming an increasingly popular choice among high-net-worth individuals and expats.
Which Country Is Best for You?
Choosing between Spain, Dubai and Italy depends on several factors: your income structure, whether itâs earned locally or abroad, and how long you plan to stay.
- Spain is ideal for highly paid employees working locally who want to benefit from a reduced flat tax rate and avoid progressive taxation.
- Dubai stands out for those looking to eliminate personal income tax altogether and operate in a tax-neutral environment.
- Italy is particularly advantageous for globally mobile individuals who generate significant income from outside the country and want the predictability of a fixed tax.
Beyond tax considerations, you should also weigh lifestyle, cost of living, residency rules, and long-term financial planning when deciding where to relocate.
At Vicox Legal, our international tax experts can guide you through the complexities of each jurisdiction. Whether you are an entrepreneur, executive, or investor, we help you choose the most efficient structure tailored to your goals. Get in touch today to optimise your global tax position with confidence.
