1. Eligibility and General Requirements

What is Italy’s 7% Pensioners Tax Regime?
It’s a special Italian tax regime for retirees who move their tax residency to certain small municipalities in southern Italy. Qualifying individuals pay only 7% on their foreign income for 10 consecutive years.

Who can benefit from the 7% regime?
Foreign retirees receiving a foreign pension who relocate their tax residence to a town with fewer than 20,000 inhabitants in Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise, or Apulia.

Which Italian towns qualify for the 7% tax benefit?
All municipalities under 20,000 inhabitants in the regions above, plus certain earthquake-affected towns such as Camerino, Matelica, Tolentino, and Norcia in central Italy.

Can northern Italian towns qualify?
No. The Italy 7% tax regime applies only to eligible towns in southern Italy and a few in central regions.

Do I need to buy a property to qualify?
No. You can rent or own your home—what matters is registering your tax residence in a qualifying municipality.

What if I move from a non-cooperative (black-list) country?
To access the 7% tax benefit, your previous residence must be in a “white-list country” that exchanges information with Italy. Relocating directly from a tax haven prevents eligibility.

Can Italian dual citizens apply?
Yes. Italian citizens returning from abroad can benefit if they were non-resident in Italy for the last five years and receive a foreign pension.

Does registration with AIRE help?
Yes. Being registered with AIRE (Registry of Italians Abroad) supports your case as a former non-resident, but you still need to meet all other conditions.

How is “non-residency for five years” determined?
It refers to tax years during which you were not registered or taxable as an Italian resident—you must demonstrate clear foreign tax residency.

2. Pension and Eligible Income

What counts as a foreign pension under the 7% regime?
Any retirement income from a foreign pension fund, social security system, or private plan qualifies.

Are U.S. or U.K. Social Security pensions included?
Yes. Social Security and state-backed pensions from abroad generally qualify unless a double tax treaty reserves taxation to the source country.

Are government or public pensions eligible?
No, if under a tax treaty those pensions are taxable only in the origin country (for example, former civil servants). They cannot be re-taxed in Italy.

What about pensions from international organizations such as the UN or NATO?
Usually not eligible, as they are exempt or taxable exclusively where the organization is based.

Are private or corporate pension funds included?
Yes. Private, corporate, or occupational pensions and annuities paid from abroad fall within the 7% tax scope.

Do lump-sum withdrawals qualify?
They can, if derived from a foreign pension plan, though a detailed tax review is advised.

Can I receive multiple pensions?
Yes—the 7% tax applies to all foreign pensions you receive.

Must I transfer my pension to Italy?
No. Your pension may remain abroad or in a foreign currency; there’s no legal obligation to transfer it.

Are survivor pensions eligible?
Potentially yes, if they are foreign pensions taxable in Italy under treaty rules.

3. Taxation and Fiscal Benefits

Which income is taxed at 7%?
All foreign-sourced income: pensions, dividends, interests, royalties, capital gains, and rental income from foreign properties.

What about Italian-sourced income?
Income generated in Italy remains subject to ordinary IRPEF rates (progressive taxation).

Are crypto capital gains included?
Yes. Gains from cryptocurrencies or digital assets held abroad are taxed at the 7% flat rate.

Do I need to report foreign assets or bank accounts?
No. Under this regime, you are exempt from wealth reporting (Form RW) and from IVIE/IVAFE taxes on assets abroad.

Is there a wealth tax exemption?
Yes—one of the main advantages. You pay no Italian wealth tax on foreign real estate, portfolios, or bank accounts.

Are inheritance and gift taxes included?
No. The 7% pensioners regime only applies to income taxation, not to estate or gift taxes.

Can I offset foreign taxes already paid?
No. The 7% is a substitute tax; foreign tax credits cannot be used.

Do I pay regional or municipal surcharges?
No. The 7% replaces all levels of income tax—national, regional, and municipal.

Are social contributions due?
No, as retirees are exempt from Italian social security contributions.

4. Residency Rules and Duration

How long does the 7% regime last?
The benefit lasts for 10 consecutive tax years.

When does the 10-year period start?
It begins the first tax year in which you become an Italian tax resident in a qualifying municipality.

Can it be renewed?
No. After ten years, you automatically transition to the ordinary tax regime.

Do I need to spend 183 days per year in Italy?
Not strictly, but you should ensure Italy is your main home and center of vital interests to maintain tax residency.

Can I travel frequently abroad?
Yes, provided your primary residence and personal interests remain in Italy.

Can I move between eligible towns?
Yes. You may relocate between qualifying municipalities (under 20,000 inhabitants) without losing eligibility.

What if my town exceeds 20,000 inhabitants later?
You remain entitled. Eligibility is assessed at the moment of relocation.

What if I move to a non-eligible town?
You lose the 7% benefit starting from that tax year.

5. Application Process and Compliance

How do I opt for the 7% flat tax in Italy?
By selecting the dedicated option in your Modello Redditi PF (Italian tax return) for the first year of Italian tax residency.

When do I exercise the option?
Typically in the first tax return filed after relocation, usually the following year.

Is a tax ruling required?
Not mandatory, but recommended for complex situations.

Which documents are needed?
Proof of your foreign pension, foreign tax residency certificates, and evidence of your Italian residence registration (rental contract or property deed).

Can I apply retroactively?
No. The option applies only from the first year of residence onward.

Can I revoke the regime?
Yes, voluntarily or automatically if conditions cease to be met, for example moving to a non-qualifying municipality.

6. Family and Dependents

Can my spouse also benefit?
Only if he or she receives a qualifying foreign pension and independently meets all requirements.

Is there a joint filing option in Italy?
No. Italy applies an individual income tax system; each spouse must file separately.

What about dependent children or relatives?
They do not benefit from the 7% rate unless they qualify independently.

What if my spouse works in Italy?
Their employment or business income will be taxed under the ordinary Italian tax regime.

7. Strategic and Practical Questions

Can I apply if I still have a business abroad?
Yes, as long as you are retired and receive a pension income.

What if I receive dividends or royalties from abroad?
They are taxed at 7% along with all your foreign-sourced income.

Can I work part-time in Italy?
You can, but any Italian-sourced employment or freelance income will be taxed under ordinary IRPEF rates.

What if I inherit property abroad?
Inheritance is not covered by the 7% tax—the benefit applies only to income taxation.

Can I lose the benefit if I move abroad again?
Yes. You must maintain Italian tax residency throughout the 10-year period.

Can I switch from the €200,000 flat tax to the 7% regime?
No. The two regimes are separate and not interchangeable.

How does the 7% regime compare to Portugal’s NHR?
It’s simpler and more stable: a flat 7% for ten years, with no wealth reporting and no risk of future revocation.

What are the advantages compared to Greece’s pension regime?
Italy’s version includes a full wealth tax exemption and greater geographic flexibility.

Is local taxation such as IMU or TARI still due?
Yes. Property and waste taxes apply as for any other Italian resident.

Is the 7% regime politically stable?
Yes. It has been active since 2019 and confirmed by successive governments, attracting retirees from the EU, UK, US, and Canada.

Conclusion: Why Choose Italy’s 7% Regime

Italy’s 7% Pensioners Regime offers one of the lowest tax burdens in Europe for retirees. It combines fiscal simplicity, lifestyle quality, and ten years of stability. By moving to a qualifying town in southern Italy, retirees can enjoy Italy’s landscapes, rich culture, and mild climate while paying only 7% on all foreign income.

If you are considering retiring in Italy and want to confirm your eligibility, Move to Dolce Vita – Tax & Legal Advice in Italy – offers end-to-end support for a compliant, stress-free relocation. Our services include:

  • Tax consultation (video or in person): bespoke guidance on the Italy 7% tax regime and your overall position.
  • Eligibility & requirements check: we verify that all statutory conditions are fully met before you move.
  • Tax computations & planning: simulations of your annual liability under the 7% regime vs ordinary taxation.
  • Tax return preparation & filing: complete drafting and submission of your Modello Redditi PF.
  • Tax payments on behalf of clients: scheduling and execution of saldo and acconti (F24), with limited PoA where needed.
  • Dealings with the Italian Revenue Agency: representation, filings, clarifications, and follow-ups.
  • Immigration procedures: support with visas (e.g., Elective Residence) and coordination of required documentation.
  • Residency procedures: municipal registration, codice fiscale, health coverage, and local compliance steps.
  • Real estate assistance: property search coordination, due diligence, notary liaison, and purchase-tax guidance.

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