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:

1. Pension income
2. Interest income
3. dividends
4. rental income
5. Royalties
6. Capital gains
7. severance payments
8. 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.