Since 2019 has introduced a new tax treatment for pensioners, adopting art. 24-ter in our Italian income tax code. Basically, a pensioner who has not been resident of Italy in the 5 years prior moving here can claim a flat 7% taxation on ALL of the foreign income sources, not just the foreign pension received. The 7% flat tax applies to all your foreign income sources including:
Pension income
Interest income
dividends
rental income
Royalties
Capital gains
severance payments
miscellaneous income
There is no income cap on the income attracted to the 7% flat tax, making it very attractive to new pensioners wishing to move to Italy without spending a fortune on taxes. This regime lasts up to 10 years, and you can drop off at any time prior the end of the period.
Our webpage here provides more details about this tax regime, however let’s recap them in this post.
7% Flat tax requirements
In order to qualify for the 7% flat tax regime for pensioners you must receive a private or public pension, it doesn’t matter whether you are a citizen of Italy or not, but you must receive a Foreign sourced pension.
You should not have been a resident of Italy in the last 5 tax years prior moving to Italy. This means that you may have been a tax resident of Italy 5 years ago or more and still qualify.
Finally, you must settle into a qualifying municipality. Note that you cannot benefit of this favourable tax treatment if you move to Italy in a non qualifying municipality, and then move into a qualifying one! Which are the qualifying municipalities for the 7% flat tax for pensioners in Italy?
7% Flat tax qualifying municipalities
In order to qualify for the 7% flat tax for pensioners you must relocate to a qualifying municipality as per the paragraph 1 of the art. 24-ter. According to it, any municipality with 20,000 inhabitants or less located in any of the following regions qualify:
Abruzzo
Apulia
Basilicata
Calabria
Campania
Molise
Sardinia
Sicily
On top of that, any municipality with 3,000 inhabitants or less as per the annexes 1, 2 e 2-bis of D.L. 17 ottobre 2016, n. 189. Such municipalities are located in Umbria, Lazio, and Le Marche and were struck by major earthquakes during 2016, and the legislator attempted to boost repopulation of such areas by providing tax incentives to new residents.
Note that the number of inhabitants is set at January 1st of any given year, therefore if you move into a qualifying municipality which then increases its inhabitants, you are not disqualified from the 7% tax regime.
Which are the new qualifying municipalities for the 7% flat tax?
The art. 6-ter Law 28 marzo 2022, n. 25 has amended the qualifying municipalities in Umbria, Lazio, and Le Marche lifting the 3,000 inhabitants constraint, allowing then ANY of the municipalities included in the above mentioned annexes to be a qualifying municipality for the 7% flat tax pensioners regime. Here below I attached a Table showing all the qualifying municipalities.
Any help with your application and tax strategy? Get in touch.
97 thoughts on “Italy 7% flat tax for pensioners”
Bryony Bethell
Hello i had been looking at moving to Spoleto under the flat tax scheme but I understand from the tax office there that despite the decree of March 2022 you mention, lifting the population limit on the communes in the previous annex ( including Spoleto) it no longer qualifies. What is your interpretation please?
Hi, is it possible to send that list to me too, please. We are looking at moving to Le Marche or Umbria. My email address is: renaforni@hotmail.com
My name is Lorena
Thank you.
I will have Dual US/Italian citizenship by December. I want to move to Italy and establish residency in Abbruzzo. I’m retired and receive a US local government pension, social security and have an IRA. Am I eligible for the 7% flat tax on all three pensions. If a dual citizen do I pay US taxes?
Hello – which towns in Lazio offer the 7% tax and how goes this apply if you are a resident in Italy for only part of the year? Would you file in the country where you reside the most?
Le pensioni pagate delle Organizzazioni Internazionali di cui l’Italia è un paese membro, possono beneficiare di questo schema? La mia pensione è pagata in Sterline da un’organizzazione Internazionale basata in UK e io sto valutando la possibilità di rientrare in Italia dopo 25 anni di residenza all’estero.
Nicolò Bolla
generalmente no poichè non sono imponibili in Italia
Russell Genna
My understanding is Italy does not have a double tax, so if as a dual US/Italian citizen I pay taxes on my US pension and Social Security in the US I do not pay an additional income tax in Italy. Am I mistaken?
I’m in the same situation and have the same question. I always heard that you have to give up US citizenship to be released from federal US taxes. Please post if you find out differently. Thanks!
I am interested in finding a 7% income tax-qualifying town/municipio’s in Le Marche as a place to retire. Can you send me a list?
Best regards
Dr P Ciancanelli
I am thinking to take advantage of the 7% tax rate by moving to a small town in Campania and becoming a tax resident of Italy. I have a US government pension that qualifies me for this — which I understand is not taxed by Italy (but will continue to be taxed by the US.)
I also will have 36,000/year rental income from a home I own in US– will be taxed by Italy and US. Also some capital gains from US-held IRA disbursements — will be taxed by Italy and US.
But my question is: since I assume I cannot be taxed twice for this income because of the bilateral tax treaty, and I can apply the foreign tax credit, is the increase in my tax burden by moving to Italy effectively 0? And if that’s true, wouldn’t it also be true for higher tax brackets? So what is the benefit/incentive to a US citizen like me of the 7% scheme? I presume I am missing something here. Is it wealth taxes? Thanks!
Basically you can claim the 7% tax paid to Italy in your US form 1116 thus reducing any tax due in the US. As an American you will not be worse off on your tax bill
Hello.
I’m a US citizen who is considering moving to Italy for retirement. Am I entitled to claim 7% on my US social security and IRA income if I settle in Puglia in a large town like Bari, Brindisi or Lecce? Or does the 7% is applicable to retired residents in only certain small towns specially designated?
Thanks!
Hi !! Can you please send me an email with the list of 7% tax for retirees. We are looking in Umbria , in the region of Perugia, in the town of Castiglione Del Lago.
Thank you !
Nicolò Bolla
can you please get in touch via email? Fill the form below
Dana Saylor
Hi there, my husband will have a US pension and we’d love to see the spreadsheet of Umbria/Le Marche/Lazio towns as well. I have cousins in Lazio south of Rome. Thank you so much for your helpful information shared here!
Buongiorno!
My husband and I are going to be retiring in Italy (we have our visas and will arrive in mid-November) and are desirous of making our permanent home in one of the qualifying regions (in a community of 20,000 or less, of course). My question: In our Visa application, we had to show that we had a lease all set up and pre-paid upon our arrival. For us, that apartment is located in Ostuni, Puglia (which is well over 20K) We were under the impression that we could initially rent anywhere in Italy upon arrival. Then, within a set time frame (?), we can search for our permanent home–which for us would be in a qualifying town in one of the 8 regions that offer the 7% flat tax rate. Am I correct? Or does the community/region that we first temporarily choose to live in upon arrival serve as the “permanent region” we have now inadvertently made? I will look forward to your reply. My thanks to you!
We were told that the first year you are a tax-resident (and this is the case after you have been an official resident for more than 183 days anywhere in Italy) you have to live in a 7% region. Were we ill informed?
Hi Nicolo, thank you for your reply. I am very sorry but we are a bit confused. We were told that the first time we are taxed we would have to live in a 7% region. Before your first taxation ( this is after you lived in Italy for more than 183 days) you can live anywhere you want in Italy.
Kind regards, Anouk
Nicolò Bolla
Dear Anouk,
you need to move your residency directly to a 7% flat tax area to benefit of such scheme
Anouk Dresens Beintema
Could you please elaborate why both Spoleto and Rieti are on the list while both have more than 20.000 inhabitants.
Many thanks, Anouk
Nicolò Bolla
because they are included in the attachments 1, 2 e 2-bis al decreto-legge 17 ottobre 2016, n. 189
Rob Hubert Dresens
Since June 25 we are in Massa Martana . Per July 5th. 2022 as resident in the community, To my opinion we are no Fiscal residents in Italy due to the 183 days starting July 5yh.. Is this correct? Than we will move to Rieti and will use the 7% Flat tax over 2023 in 2024 is this correct ?
Hello,
My wife and I are both recipients of pensions that are paid by the US government, as we were both public employees. We understand that normally because of tax agreements between the two countries, this type of pensions are only taxable at the source and therefore ours are “non imponibili” in Italy. Does the 7% flat tax rate allow the Italian government to tax our pensions? If that is not the case, as I presume, will we not qualify for this tax regime because our pensions are non taxable? Or do we qualify anyways since we do have the foreign pensions (as required) and they can tax our other sources of income (IRAs, interest, stocks).
Thank you.
Hi Niccolo` thank you for your reply. one more quick question; since our civil service pensions do not qualify us for the 7% tax scheme, will our annuities be considered foreign sourced pensions? We rolled over our IRA accounts into a fixed annuity with an insurance company that will pay out a fixed monthly payment to us, for life. It seems to me that that would be the same as a foreign sourced pension and therefore qualify. Am I correct?
Grazie mille.
Apologies if this has been asked before…would you confirm that we could relocate to any village, town or city in Umbria with no specific population and qualify for the 7% flat tax rate. Thank you.
Hi
I receive a private pension in the UK. I’m a UK citizen and have been a tax resident outside of Italy for the required period. I bought a house with my wife last April in a qualifying comune/region. I have not retired, despite receiving a pension (I’m 56), as I have my own company which I intend to keep running.
Can I claim the 7% tax rate on employment income as well as the pension income?
For info, I intend to become non-domiciled in the UK for tax purposes in any event, so double taxation would not apply. My employment involves travel that would keep me outside of the UK for the required period and my only home would be in Italy.
Thanks in advance.
Thank you Nicola. I too am looking at taking some retirement from the UK as AIRE, but also wish to keep working and my UK Ltd company. So I seem to understand as above this would also be allowed for me? Grazie.
Hello Nicolo, I’m considering Giovinazzo (close to Bari). Will that qualify? Also, if you happen to know….when do the Jan 2023 population numbers post? Giovanazzo is seems to be bumping up close to that 20,000 number.
Hello Nicolo’
My husband and I are both dual US Italian citizens, but have always lived in the US. What documentation would Italy look for to prove we were not resident in Italy for the previous 5 years? We want to have this saved and bring it with us in case we are audited in the future after moving to Italy and claiming the 7% regime. Grazie!
The tax office deems sufficient the following supporting evidence:
– Tax returns
– Income statements
– Real estate property purchase deeds
– Rental agreements
– Utilities and bills
– Bank statements
Dear Nicolò, would I qualify for the 7% flat tax if my retirement income derives mainly from passive income investment accounts, in addition to a small American social security income? The social security income is only about 10% of my entire retirement income. Thanks.
Hello, my husband and I are thinking of moving from overseas to a qualifying municipality in Italy. My husband is already receiving a pension, however I am not yet, as the earliest age I could draw a pension from my pension scheme would be at 55 years of age, and I am currently 52. Could I move to Italy as well and qualify for the same tax treatment as the spouse of a pensioner? It would be my intention to draw a pension in Italy in the future, but possibly not as early as at age 55. Thank you.
Nicolo, following up on your answer to Marta, if I have a joint life retirement annuity that pays me now and then my wife after my death, does that count as pension income for both of us? My wife is also named in the annuity certificate. Thank you.
Hard to tell without checking any papers. If you both receive the payment, then you both qualify as you have a pension income sourced from outside of Italy
Dear Nicolo,
I am a dual citizen and I plan on moving from the US to Italy into a 7% town in September 2024 and immediately registering as a permanent resident. Therefore, 2025 will be my first tax year in Italy. My first tax filing (for 2025) will be in 2026. For the 7% I need to show proof of a pension. I want to delay starting my pension for as long as possible to bump up the payout. Which year (2024, 2025, or 2026) must I turn my pension on in order to qualify for the 7%? Is it 2024 when I register? Is it 2025 so it’s in place during my tax year? Or is it 2026 indicating it’s in place before my first filing?
Hi Nicolo,
We have been living permanently in Abruzzo around 8 years. My wife is Italian citizen and we moved from Ireland, I have full residency. She has a small state pension from Ireland.
Can we apply for this 7% flat rate at this stage?
Hello i had been looking at moving to Spoleto under the flat tax scheme but I understand from the tax office there that despite the decree of March 2022 you mention, lifting the population limit on the communes in the previous annex ( including Spoleto) it no longer qualifies. What is your interpretation please?
Spoleto is above 20,000 inhabitants
The qualifying municipalities in Umbria, Lazio, and Le Marche are not listed. Can you tell me how to get them or attach a list for me by return email?
Thank You
Terry Iverson
happy to do that, please send me an email
We would also be most interested to receive theekist of qualifying municipalities in Umbria, Lazio and Le Marche.
please check the chart in this page!
Ciao Nicolò,
Could you please share the list with qualifying municipalities for the flat tax rate in le Marche?
Feel free to email us, we can provide it
Hi, is it possible to send that list to me too, please. We are looking at moving to Le Marche or Umbria. My email address is: renaforni@hotmail.com
My name is Lorena
Thank you.
Email sent! Check your spam folder too
So Le Marche has now lifted the 3,000 population to under the 20,000 population for the 7% flat rate tax for pensioners, have I read that right?
I will have Dual US/Italian citizenship by December. I want to move to Italy and establish residency in Abbruzzo. I’m retired and receive a US local government pension, social security and have an IRA. Am I eligible for the 7% flat tax on all three pensions. If a dual citizen do I pay US taxes?
You can claim 7% on all your foreign income sources!
Hello – which towns in Lazio offer the 7% tax and how goes this apply if you are a resident in Italy for only part of the year? Would you file in the country where you reside the most?
you can check the list in our page.
If you don’t reside here full time, there is no need to pay tax
Le pensioni pagate delle Organizzazioni Internazionali di cui l’Italia è un paese membro, possono beneficiare di questo schema? La mia pensione è pagata in Sterline da un’organizzazione Internazionale basata in UK e io sto valutando la possibilità di rientrare in Italia dopo 25 anni di residenza all’estero.
generalmente no poichè non sono imponibili in Italia
My understanding is Italy does not have a double tax, so if as a dual US/Italian citizen I pay taxes on my US pension and Social Security in the US I do not pay an additional income tax in Italy. Am I mistaken?
your understanding is correct
I’m in the same situation and have the same question. I always heard that you have to give up US citizenship to be released from federal US taxes. Please post if you find out differently. Thanks!
this is correct. You need not to be a US citizen to avoid paying taxes
I am interested in finding a 7% income tax-qualifying town/municipio’s in Le Marche as a place to retire. Can you send me a list?
Best regards
Dr P Ciancanelli
Just sent you an email. Please check your spam folder too
I am thinking to take advantage of the 7% tax rate by moving to a small town in Campania and becoming a tax resident of Italy. I have a US government pension that qualifies me for this — which I understand is not taxed by Italy (but will continue to be taxed by the US.)
I also will have 36,000/year rental income from a home I own in US– will be taxed by Italy and US. Also some capital gains from US-held IRA disbursements — will be taxed by Italy and US.
But my question is: since I assume I cannot be taxed twice for this income because of the bilateral tax treaty, and I can apply the foreign tax credit, is the increase in my tax burden by moving to Italy effectively 0? And if that’s true, wouldn’t it also be true for higher tax brackets? So what is the benefit/incentive to a US citizen like me of the 7% scheme? I presume I am missing something here. Is it wealth taxes? Thanks!
Basically you can claim the 7% tax paid to Italy in your US form 1116 thus reducing any tax due in the US. As an American you will not be worse off on your tax bill
Hello.
I’m a US citizen who is considering moving to Italy for retirement. Am I entitled to claim 7% on my US social security and IRA income if I settle in Puglia in a large town like Bari, Brindisi or Lecce? Or does the 7% is applicable to retired residents in only certain small towns specially designated?
Thanks!
Bari, Brindisi or Lecce do not qualify because the municipality must have a population of 20,000 inhabitants or less
Hi, my computer does not show the list of qualifying municipalities in Le Marche. Can you send me the list? Grazie!!
Email sent! Check your spam folder too
Hello,
Would like to see the list of qualifying municipalities please. Thanks very much.
Maria Tulipani
there is the link in the article
Hi !! Can you please send me an email with the list of 7% tax for retirees. We are looking in Umbria , in the region of Perugia, in the town of Castiglione Del Lago.
Thank you !
can you please get in touch via email? Fill the form below
Hi there, my husband will have a US pension and we’d love to see the spreadsheet of Umbria/Le Marche/Lazio towns as well. I have cousins in Lazio south of Rome. Thank you so much for your helpful information shared here!
Hello – can you please send me the qualifying municipalities for Lazio.
Grazie
Aurelio
please check the chart in the web page
Buongiorno!
My husband and I are going to be retiring in Italy (we have our visas and will arrive in mid-November) and are desirous of making our permanent home in one of the qualifying regions (in a community of 20,000 or less, of course). My question: In our Visa application, we had to show that we had a lease all set up and pre-paid upon our arrival. For us, that apartment is located in Ostuni, Puglia (which is well over 20K) We were under the impression that we could initially rent anywhere in Italy upon arrival. Then, within a set time frame (?), we can search for our permanent home–which for us would be in a qualifying town in one of the 8 regions that offer the 7% flat tax rate. Am I correct? Or does the community/region that we first temporarily choose to live in upon arrival serve as the “permanent region” we have now inadvertently made? I will look forward to your reply. My thanks to you!
albeit there is no tax office guidance on this, I advise to get the lease in a qualifying municipality
We were told that the first year you are a tax-resident (and this is the case after you have been an official resident for more than 183 days anywhere in Italy) you have to live in a 7% region. Were we ill informed?
in order to claim the 7% regime you must from overseas directly to a qualifying municipality
Hi Nicolo, thank you for your reply. I am very sorry but we are a bit confused. We were told that the first time we are taxed we would have to live in a 7% region. Before your first taxation ( this is after you lived in Italy for more than 183 days) you can live anywhere you want in Italy.
Kind regards, Anouk
Dear Anouk,
you need to move your residency directly to a 7% flat tax area to benefit of such scheme
Could you please elaborate why both Spoleto and Rieti are on the list while both have more than 20.000 inhabitants.
Many thanks, Anouk
because they are included in the attachments 1, 2 e 2-bis al decreto-legge 17 ottobre 2016, n. 189
Since June 25 we are in Massa Martana . Per July 5th. 2022 as resident in the community, To my opinion we are no Fiscal residents in Italy due to the 183 days starting July 5yh.. Is this correct? Than we will move to Rieti and will use the 7% Flat tax over 2023 in 2024 is this correct ?
this is quite complicated. It depends if you claimed tax residency somewhere else in 2022
Goodmorning,
Could you confirm that Selci in Rieti comes under the 7% regime?
Kind regards,
Anouk Dresens-Beintema
it is not included in the list
Please would you send me a list of the qualifying towns in Umbria and Le Marche. Thank you.
Hello,
My wife and I are both recipients of pensions that are paid by the US government, as we were both public employees. We understand that normally because of tax agreements between the two countries, this type of pensions are only taxable at the source and therefore ours are “non imponibili” in Italy. Does the 7% flat tax rate allow the Italian government to tax our pensions? If that is not the case, as I presume, will we not qualify for this tax regime because our pensions are non taxable? Or do we qualify anyways since we do have the foreign pensions (as required) and they can tax our other sources of income (IRAs, interest, stocks).
Thank you.
If you are not a dual citizen, your civil service pensions are non taxable in Italy regardless of the tax scheme you use (7% or not)
Hi Niccolo` thank you for your reply. one more quick question; since our civil service pensions do not qualify us for the 7% tax scheme, will our annuities be considered foreign sourced pensions? We rolled over our IRA accounts into a fixed annuity with an insurance company that will pay out a fixed monthly payment to us, for life. It seems to me that that would be the same as a foreign sourced pension and therefore qualify. Am I correct?
Grazie mille.
Apologies if this has been asked before…would you confirm that we could relocate to any village, town or city in Umbria with no specific population and qualify for the 7% flat tax rate. Thank you.
Umbria does not qualify in full, you must relocate to towns subject to the 2012 earthquake only
Hi
I receive a private pension in the UK. I’m a UK citizen and have been a tax resident outside of Italy for the required period. I bought a house with my wife last April in a qualifying comune/region. I have not retired, despite receiving a pension (I’m 56), as I have my own company which I intend to keep running.
Can I claim the 7% tax rate on employment income as well as the pension income?
For info, I intend to become non-domiciled in the UK for tax purposes in any event, so double taxation would not apply. My employment involves travel that would keep me outside of the UK for the required period and my only home would be in Italy.
Thanks in advance.
if the employment income is foreign, you can claim the 7% tax scheme on all your income sources
Thank you Nicola. I too am looking at taking some retirement from the UK as AIRE, but also wish to keep working and my UK Ltd company. So I seem to understand as above this would also be allowed for me? Grazie.
yes, as long as you have a non Italian pension income source
Could you please email me the site where I can check population for municipalities in Abruzzo. I can only find Wikipedia. Looking at Silvi .
There is no official list. You should check on the ISTAT website
Hello Nicolo, I’m considering Giovinazzo (close to Bari). Will that qualify? Also, if you happen to know….when do the Jan 2023 population numbers post? Giovanazzo is seems to be bumping up close to that 20,000 number.
On January 1st 2022 the population was 19,485 as per the Italian bureau of statistics link
I would check with the Comune to have an exact figure
Hello Nicolo’
My husband and I are both dual US Italian citizens, but have always lived in the US. What documentation would Italy look for to prove we were not resident in Italy for the previous 5 years? We want to have this saved and bring it with us in case we are audited in the future after moving to Italy and claiming the 7% regime. Grazie!
The tax office deems sufficient the following supporting evidence:
– Tax returns
– Income statements
– Real estate property purchase deeds
– Rental agreements
– Utilities and bills
– Bank statements
Dear Nicolò, would I qualify for the 7% flat tax if my retirement income derives mainly from passive income investment accounts, in addition to a small American social security income? The social security income is only about 10% of my entire retirement income. Thanks.
Yes you qualify. The law requires you to have at least one pension income source; there is no indication on the minimum income amount of such pension
Hello, my husband and I are thinking of moving from overseas to a qualifying municipality in Italy. My husband is already receiving a pension, however I am not yet, as the earliest age I could draw a pension from my pension scheme would be at 55 years of age, and I am currently 52. Could I move to Italy as well and qualify for the same tax treatment as the spouse of a pensioner? It would be my intention to draw a pension in Italy in the future, but possibly not as early as at age 55. Thank you.
Unfortunately you cannot. In Italy taxes are paid individually, and each individual shall qualify for the scheme
Nicolo, following up on your answer to Marta, if I have a joint life retirement annuity that pays me now and then my wife after my death, does that count as pension income for both of us? My wife is also named in the annuity certificate. Thank you.
Hard to tell without checking any papers. If you both receive the payment, then you both qualify as you have a pension income sourced from outside of Italy
I have the same issue. I am counting on buying a small annuity for the bridge time and call it my pension.
Dear Nicolo,
I am a dual citizen and I plan on moving from the US to Italy into a 7% town in September 2024 and immediately registering as a permanent resident. Therefore, 2025 will be my first tax year in Italy. My first tax filing (for 2025) will be in 2026. For the 7% I need to show proof of a pension. I want to delay starting my pension for as long as possible to bump up the payout. Which year (2024, 2025, or 2026) must I turn my pension on in order to qualify for the 7%? Is it 2024 when I register? Is it 2025 so it’s in place during my tax year? Or is it 2026 indicating it’s in place before my first filing?
Hi Nicolo,
We have been living permanently in Abruzzo around 8 years. My wife is Italian citizen and we moved from Ireland, I have full residency. She has a small state pension from Ireland.
Can we apply for this 7% flat rate at this stage?