The French Prime Minister François Bayrou, a couple of days ago, accused Italy of practising fiscal dumping. An accusation, to tell the truth, that was far from circumstantial: rather than a well-considered stance, it seemed to be a hasty joke, snatched away by the pressure of journalists’ questions. Besides, the problems France faces today are quite different. But since Bayrou wanted to launch the provocation, let us try to understand whether – and to what extent – he might be right.

What, first of all, is tax dumping? In short, it is a form of unfair competition that, applied to the tax field, means having a taxation system so advantageous that it attracts capital from other countries. Now, to think that Italy can offer such a competitive advantage sounds at least singular, considering the state of our industrial fabric: factory closures, delocalisations, relocation of tax and legal offices abroad, and so on.

The ‘flat tax for the rich’ in the crosshairs

Perhaps the French Prime Minister was alluding to the so-called ‘flat tax for the rich’. And that is likely. What does this facilitation consist of? Basically, those who transfer their tax residence to Italy, provided they have not resided there for at least nine tax periods in the last ten years, can pay a fixed substitute tax of EUR 200,000. It must be said that the Meloni government has doubled the original figure, set at 100,000 euro by the Renzi government, which had introduced the measure to incentivise the return of the so-called ‘brain drain’ (mostly now permanently departed). It is important to point out that the flat tax only benefits income earned abroad: income earned in Italy remains subject to ordinary taxation.

Beyond accusations: the real goal is a united fiscal Europe

The question then arises: how many super-rich have actually taken advantage of this scheme? The answer is about two thousand. A figure that is certainly significant, but by far insufficient to assume a mass migration to our country. It should not be forgotten, moreover, that the Court of Auditors has expressed critical assessments of this measure, deeming it not very controllable. It remains to be seen whether changes or corrections will be introduced in the future.
In the final analysis, Bayrou’s accusation seems greatly exaggerated – very, very much exaggerated indeed – and he should probably address his concerns elsewhere, while remaining within the European space. The day the European Union succeeds in achieving full fiscal harmonisation, and perhaps even in building a true single capital market, we will truly be able to call ourselves a stronger and more competitive continent.