I'm not a tax adviser but I've been researching the topic for a while. If you become a resident of Italy (183+ days in the country) you have to pay 26% on all your capital gains (except European bonds taxed at 12,5%) and 0,2% on your capital or you can choose to pay a flat tax of 100k in you don't have Italian citizenship. If you are a US citizen you have to report and pay(?) taxes in the US if you make more than 100k outside the US. The madness is not so much the tax owed but how it's calculated. (Italy has the most complex tax code in the world after Brazil): 1. Italy has a financial transaction tax so algo trading on Italian markets is out of the question. 2. ETFs: you cannot compensate losses with gains. This means if you algo trade an ETF and make 1 million in profits and 1 million losses you still have to pay taxes of 26% on 1 million even though you made no profit. Losses can only be compensated with gains in derivatives and stocks so you have to (hope) to make some profits there. (to make matters worse any tax credits expire after 4 years) 3. All trades have to be converted to Euro daily. This means you are subject to currency fluctuations which is especially bad if you trade derivatives as the nominal value is the reference (I believe but I'm not 100% positive). All this combined means even if you make no profits at all you could receive a tax bill that is higher than your principal wiping you out. One solution would be to move to Malta or Monaco. (The tax authority is cracking down on fake residencies so you really have to spend most of the time there) Monaco requires at least 1 million in cash to be able to move there realistically(to live in a shitty 1 br apartment). Malta does not tax capital gains earned outside Malta but it is not clear if an algo hosted on a US server (which requires the occasional log in for maintenance and maybe closing of positions in an emergency situation from Malta) qualifies for that. We could ask a tax attorney there or the tax authority to clarify that and split the consultancy bill.
https://blog.kpmg.lu/five-myths-about-the-183-day-rule/ You are no tax advisor, these people are. The 183 days rule is mostly used for employees, for people who are self employed or trading for their own account situation can be different and in some countries for these people the 183 days rule is even not a criteria for taxation. OP should just take advice from real tax advisors and forget all the rest.
Wrong, the law clearly says "regardless of whether he or she is an Italian citizen". "The individual should not have been tax resident in Italy in the last 10 years."