The Schengen Shuffle

When my wife and I started this blog, we both had never heard of the Schengen Shuffle. We were vaguely aware that you could stay in Italy for up to 90 days without a visa. As we are departing for Italy in only a couple of days and I wanted to write a pre-departure blog post, I decided this would be a perfect last state-side article.

The Schengen 90/180-day rule applies to non-EU travelers visiting a Schengen Zone country. The rule allows one to stay in a Schengen country for up to 90 days – within any rolling 180-day period – no visa required. This was passed as a part of European Union law in 2006, then repealed and replaced by the current regulation in 2016.

The 90 days are cumulative across all Schengen countries. The 180-day period is rolling, meaning you must count back 180 days from any given date to check how many days you’ve already used. If you overstay, you could face fines, deportation, or future entry bans.

For an example, if you enter Italy on January 1 and stay 90 days continuously, you must leave by March 31. You cannot re-enter Italy or any other Schengen country until at least June 30.

As always, there are some exceptions. It is theoretically possible to stay in Italy up to an additional 90 days, but permission must be requested for a Schengen visa extension. This extension is not guaranteed and requires justification, such as a medical emergency or unforeseen events preventing departure. Also, this would likely prevent returning to Italy for a subsequent 180 days.

Italy, as well as most other European Union countries, participate in the Schengen rule. The only EU countries that are in the EU but do not participate are Bulgaria, Cyprus, Ireland, and Romania. Also, there are four countries that are not members of the EU but do participate:  Iceland, Liechtenstein, Norway, and Switzerland.

There are applications, such as “Schengen Calculator 90/180”, that can be installed on a mobile device. These apps keep track of, over the last rolling 180 day window, the number of days used in the Schengen Area and the number of days remaining. One can also look forward on their calendar to see the earliest date for reentry.

At first glance, it would seem that “90 in 180” would mean you could simply spend half a year in Italy, as long as each period of time did not exceed 90 days. But, for example, if you wanted to spend two months at a time, this would not be possible. There would be a period of time in the rolling 180 days window where the two month rotation would exceed the 90 day limit. Therefore, an app to help with this is really useful to help with planning.

The Schengen rule allows an accumulative stay in Italy for almost half of the year. One could plan to spend two seasons each year, such as every fall and spring.  

By staying in Italy no more than 180 days a year, one avoids becoming a “tax resident”. This avoids the complexity of having to file two tax returns each year. More importantly, it avoids the potential for significantly higher tax liability. Italy’s progressive income tax rates are approximately two to four times higher than the rates in the U.S.

Italy does allow for U.S. citizens to own property in Italy without being an Italian resident or citizen. So, it would be possible to buy property in Italy. However, since the property would not be a “primary residence”, it would be subject to the Italian IMU (property tax). This is normally around 0.86% of the cadastral (a different way for assessing property valuation that is usually less than market) value.

When considering moving to Italy semi-permanently on a long stay visa, such as an Elective Residency Visa, one would face a big decision on whether or not to move to a 7% flat tax area. This has huge tax implications, especially over ten years. It can be a significant dilemma. Instead, if one limits time in Italy to two seasons a year, then this difficult decision is avoided.

Another advantage of the Schengen Shuffle is it avoids the issue of needing to continue paying for Medicare premium payments in the U.S. However, this is only necessary if one wants to keep the option of returning to the U.S. at some future date and avoid the huge late-enrollment penalties that would be assessed if Medicare coverage had been interrupted. A disadvantage of the Schengen Shuffle is most emergency foreign travel coverage (ex. Medigap G plans) are limited to the first 60 days of travel. So one would have to consider purchasing international travel insurance.

As Paula and I have been doing serious research on the implications of moving to Italy, either part-time or more permanently, it seems that the Schengen Shuffle might be the best pathway forward for us, at least at this time. Soon we will be transitioning from the “analytical research” phase – into the “living in Italy” phase. We both anticipate that this experience might totally overshadow the research and planning we’ve being doing here in Texas. We are starting this three month adventure with an open mind to all possibilities. For us, there has always been something magical about Italy that has resonated deeply within our souls. Sometimes it is better to follow where the heart leads.

Vedremo!