30/04/2026
There has been an update to the 7% pensioners flat tax scheme from April.
The list of comunes eligible for this scheme has been amplified – now you can opt for a comune of up to 30.000 inhabitants (as at the ISTAT count on the 1 January in the year preceding opting in) – in the south of Italy or in the defined seismic areas of mid-Italy – Lazio, Le Marche and Umbria.
The rules remain largely the same: if you are from a non-Schengen country you will still need a visa to opt in.
The other rules are:
1. You have not been tax resident in Italy for the five years leading up to the opt in.
2. Your pension is a government or private pension from your home country which is not taxed in that country. A Double tax agreement needs to be in place
3. Workplace benefits with drawdowns are generally not eligible for the incentive, as are some pensions which are exclusively taxed in your home country.
The benefits are:
The incentive lasts for 10 years from the date of opt in – that is your first tax year in Italy. (simply put the first year in which you spend more than 183 days in Italy) If you don’t opt in during that year, you will lose the whole incentive.
You will be exempt from normal Italian tax rates on income earned in Italy
You will be exempt from dividends and income from investments from non-Italian companies
You will be exempt from having to fill in the RW section of your tax return for foreign holdings
You will be exempt from IVIE and IVAFE on foreign assets (such as a house in your home country)
The disadvantages are:
You have no further deductions – for medicines, state incentives, restoration, solar panels etc etc etc
Any other Italian income (such as rental) or salary is taxed at normal rates.
Any dividends or investment income on Italian assets is taxed at normal rates
You cannot claim tax credits on tax paid in other countries.
At the end of 10 years you automatically switch to normal Italian tax bands
If you move within 10 years to a non qualifying comune, you lose the incentive
Not all pensions can be taxed in Italy, so you may not qualify for the Italian incentive.
