International Taxation: A Comparison Between Spain, Dubai, and Italy

Publicado: 28-03-2025

When choosing where to reside in order to optimize tax burdens, three countries often stand out among expatriates and highly paid professionals: Spain, Dubai, and Italy. Each offers unique advantages and specific features in their tax systems that can make a significant difference in the tax planning of individuals and businesses. In this article, we examine the key differences between these three regimes.

Spain: The Beckham Law

The Beckham Law is a special tax regime aimed at attracting foreign talent to Spain. Initially designed for professional football players, it is now widely used by international professionals and executives. Its main features include:

• A flat 24% income tax on the first €600,000 of annual income. Income above that amount is taxed at 47%.
• Foreign-source income is exempt from Spanish taxation, except for income from Spanish real estate or capital gains on Spanish assets.
• Duration of the regime: up to six years (the year of arrival plus five additional years).
• Requirements: The individual must not have been a tax resident in Spain in the last five years and must be employed by a Spanish company or transferred within an international corporate group.

This regime can be especially attractive for those with high incomes, as it avoids Spain’s progressive personal income tax (IRPF), which can exceed 50% in some autonomous communities.

Dubai: A Tax-Free Income Haven

Dubai, part of the United Arab Emirates (UAE), is a highly attractive destination from a tax perspective. Its main advantages include:

• 0% personal income tax, meaning residents pay no tax on their global income.
• No taxes on dividends, capital gains, or interest, making it an ideal location for entrepreneurs and investors.
• A 9% corporate tax, applicable only to businesses with income above AED 375,000 (approximately €95,000), with many free zones offering full tax exemptions for several years.
• 5% VAT, one of the lowest rates globally, applied to goods and services.

Dubai’s primary appeal is the complete absence of direct personal income taxes, making it a key destination for expatriates and entrepreneurs looking to maximize net income.

Italy: Non-Domiciled Resident Regime and Flat Tax for Expatriates

Italy has recently implemented tax regimes designed to attract high-income foreign individuals:

• A €100,000 flat tax per year on foreign income, regardless of the total amount. This is particularly advantageous for individuals with substantial global income.
• Impatriates regime: a 70% to 90% exemption on employment income generated in Italy for the first five years. This aims to attract talent and professionals to live and work in the country.
• Duration: up to 15 years for the flat tax regime, and up to 10 years for the impatriates regime.
• Requirements: To access the flat tax regime, the person must transfer tax residency to Italy and must not have been a resident in 9 out of the previous 10 years. The impatriates regime requires the individual to have lived outside of Italy for at least two years.

These regimes allow professionals, athletes, and businesspeople to significantly reduce their tax burden if they choose to move to Italy.

Comparison and Conclusion

Factor	Spain (Beckham Law)	Dubai	Italy
Personal income tax	24% up to €600,000, 47% after	0%	€100,000 flat tax (optional)
Exemption on foreign income	Yes, in specific cases	Yes, full exemption	Yes, under flat tax regime
Corporate tax	25%	9% (conditions apply)	24%
Duration of regime	Up to 6 years	Permanent	Up to 15 years
VAT	21%	5%	22%

 

Each country offers advantages depending on the resident’s profile. Spain is attractive for high earners seeking a reduced tax rate compared to the progressive system. Dubai is ideal for those wanting to avoid direct income taxation entirely. Italy, on the other hand, provides compelling incentives for business owners and global earners.

When choosing the best option, it is essential to consider not only the tax benefits but also factors such as quality of life, cost of living, and professional opportunities in each destination.

At Gentile Law, we have a team specialized in international tax advisory for expatriates, investors, and professionals seeking tax optimization. If you need guidance in choosing the tax regime that best suits your situation, don’t hesitate to contact us. We help you navigate the legal and tax complexities so you can make the best decision for your financial future.

 

Ana García Ginés
anagarcia@gentile.law
+34 604 51 21 60

 

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