LumenCan foreign pensioners pay a 7% flat tax if they move to southern Italy?
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Yes. Under TUIR art. 24-ter, people receiving a pension from a foreign payer who move their tax residence to a qualifying municipality of up to 30,000 inhabitants in southern Italy, or in listed earthquake areas, can pay a flat 7% substitute tax on all their foreign income. They must not have been Italian tax resident in the previous five years.
Key facts
| What | The law says | Source |
|---|---|---|
| Who | Individuals with pension income (art. 49(2)(a)) paid by foreign payers | TUIR, art. 24-ter(1) |
| Where you must move | A municipality in Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise or Puglia; or in annexes 1, 2 and 2-bis of DL 189/2016; or hit by the earthquake of 6 April 2009 — in all cases with no more than 30,000 inhabitants | TUIR, art. 24-ter(1) |
| Rate | 7% substitute tax on foreign income of any category, for each year of the option | TUIR, art. 24-ter(1) |
| Time abroad before | Not Italian tax resident in the 5 tax periods before the option takes effect | TUIR, art. 24-ter(2) |
| Country you come from | One with which administrative cooperation agreements are in force | TUIR, art. 24-ter(2) |
| How to opt | In the tax return for the year you move; effective from that year | TUIR, art. 24-ter(5) |
| How long | The first 9 tax periods after the one in which the option takes effect | TUIR, art. 24-ter(4) |
| Payment | One instalment, by the deadline for the income tax balance; not deductible from any other tax | TUIR, art. 24-ter(6) |
Who qualifies
The law requires three things: a pension paid from abroad, a move of tax residence to one of the listed southern or earthquake-area municipalities with no more than 30,000 inhabitants, and no Italian tax residence in the previous five years. You must also come from a country that has administrative cooperation agreements with Italy in force. When you opt, you name the country or countries where you were last tax resident, and the Agenzia delle Entrate passes this on to them (art. 24-ter(3)).
What it covers
Once you opt, the 7% applies to all foreign income of any category, not only the pension. You can choose to leave out income from one or more countries; that income is then taxed under the ordinary rules with a foreign tax credit (art. 24-ter(8)).
Losing the regime
The law lets you revoke the option. It also ends if the requirements turn out not to be met or stop being met, or if you don’t pay the 7% tax in full — unless you pay it by the balance deadline of the following year, with penalties and interest. After a revocation or forfeiture you can’t opt again (art. 24-ter(7)).
Related questions
- The rules apply “without prejudice to” the flat tax for new residents in TUIR art. 24-bis (art. 24-ter(1)).
Sources
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