{"id":2693,"date":"2023-07-24T13:46:11","date_gmt":"2023-07-24T13:46:11","guid":{"rendered":"https:\/\/www.italyvisainvestments.com\/?page_id=2693"},"modified":"2026-03-27T08:00:51","modified_gmt":"2026-03-27T08:00:51","slug":"foreign-pension-holders","status":"publish","type":"page","link":"https:\/\/www.italyvisainvestments.com\/en\/relocation-and-life-in-italy\/tax-benefits-for-foreigners-in-italy\/foreign-pension-holders\/","title":{"rendered":"Foreign Pension Holders"},"content":{"rendered":"
Tax benefits<\/div>\n

Foreign pension holders<\/h1>\n
\n

The tax regime for foreign pension holders<\/strong> is a highly relevant topic, not only for Italian citizens but also for foreigners seeking tax benefits in Italy<\/strong>.<\/p>\n

As we will see below, this benefit is granted to those who establish tax residency<\/strong> in certain designated territories<\/strong>. The regime consists of applying a substitute tax on personal income tax (Irpef) at a fixed rate of 7%<\/strong> on any category of income generated abroad, for each of the nine tax periods<\/strong> during which the option remains valid (Article 24-ter of the TUIR, introduced by Article 1, paragraph 273, of Law No. 145\/2018<\/strong>).<\/p>\n

Objective of This Tax Incentive<\/strong><\/p>\n

The primary aim of this tax benefit is to attract individuals holding capital and financial resources<\/strong> to southern Italian municipalities (Mezzogiorno) and\/or areas affected by seismic events<\/strong>, encouraging them to invest in Italy.<\/p>\n

This fiscal regime<\/strong> provides significant tax benefits<\/strong> and exemptions<\/strong> for foreign retirees receiving a foreign pension<\/strong>. However, before fully benefiting<\/strong> from these advantages, it is essential to understand the eligibility requirements and legal implications<\/strong>.<\/p>\n

For this reason, consulting a tax lawyer (avvocato tributarista) or an accountant (commercialista) specialized in international taxation<\/strong> may be necessary to ensure compliance<\/strong> and maximize tax advantages<\/strong>.<\/p>\n<\/div>\n

\"\"<\/p>\n

Benefits of the article 24-ter tuir regime<\/h2>\n
\n

Foreign pension holders who meet the requirements of the Article 24-ter TUIR regime<\/strong> benefit from the tax advantage of being able to pay a substitute tax on personal income tax (Irpef)<\/strong> and related local surcharges on foreign income of any category.<\/p>\n

    \n
  • The tax rate is fixed at 7%<\/strong> and applies for each tax year<\/strong> in which the option remains valid.<\/li>\n
  • The tax must be paid in a single installment<\/strong> within the deadline for the final balance of income tax payments.<\/li>\n
  • The substitute tax fully satisfies<\/strong> the tax obligation owed to the Italian State on foreign income<\/strong>, which means these earnings will not be subject to any additional substitute tax or withholding tax<\/strong>.<\/li>\n
  • Any withholding taxes already applied can be offset or refunded<\/strong> to prevent double taxation<\/strong>, as confirmed by the Italian Revenue Agency (Agenzia delle Entrate)<\/strong>.<\/li>\n<\/ul>\n<\/div>\n

    [sign-in]<\/p>\n

    Who can benefit from the article 24-ter regime?<\/h2>\n
    \n

    To qualify for the Article 24-ter regime<\/strong>, pensioners must meet the following requirements:<\/p>\n

      \n
    1. Tax Residence in Italy<\/strong><\/li>\n<\/ol>\n

      The applicant must transfer their tax residence to Italy<\/strong> and obtain registration at the civil registry (Anagrafe) of the Italian municipality<\/strong> where they intend to reside.<\/p>\n

      To qualify for the tax benefit, the tax residence must be established in one of the following locations<\/strong>:<\/p>\n

        \n
      • A municipality with fewer than 20,000 inhabitants<\/strong> located in one of these Italian regions<\/strong>:<\/li>\n<\/ul>\n

        Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise, Puglia<\/strong>;<\/p>\n

          \n
        • Or, a municipality with fewer than 3,000 inhabitants<\/strong> that was affected by seismic events<\/strong>, as listed in Annexes 1, 2, and 2-bis of Decree-Law 189\/2016<\/strong>, covering the regions of Abruzzo, Marche, Umbria, and Lazio<\/strong>.<\/li>\n<\/ul>\n

          However, the \u201cSostegni Ter\u201d decree (Dl 4\/2022)<\/strong> has expanded<\/strong> the eligible beneficiaries of this favorable tax regime:<\/p>\n

            \n
          • Foreign pensioners can now also qualify<\/strong> if they move to municipalities affected by the 2009 L\u2019Aquila earthquake<\/strong>.<\/li>\n
          • The 20,000-resident limit<\/strong>, previously applicable only to southern regions<\/strong>, is now extended<\/strong> to all eligible municipalities<\/strong>, including those affected by earthquakes, which were previously restricted to a 3,000-resident limit<\/strong>.<\/li>\n
          • The Italian Revenue Agency<\/strong> specifies that newly eligible towns<\/strong> now include places previously excluded<\/strong>, such as Camerino, Matelica, Tolentino, and Norcia<\/strong>.<\/li>\n<\/ul>\n

            For determining the population size<\/strong> of a municipality, the \u201cAnnual Municipal Survey on Population and Housing Movements\u201d (Rilevazione comunale annuale del movimento e calcolo della popolazione)<\/strong> published by ISTAT<\/strong> is used. The relevant population data is that of January 1st of the year preceding<\/strong> the first period of validity<\/strong> of the option. This data remains valid throughout the entire period, as long as the taxpayer does not move to another municipality<\/strong>.<\/p>\n

            Additionally, the applicant must not have been a tax resident in Italy for at least five tax periods<\/strong> preceding the effective date of the tax benefit.<\/p>\n

              \n
            1. Previous Residence in Eligible Countries<\/strong><\/li>\n<\/ol>\n

              The applicant must have previously resided<\/strong> in a country that has an administrative cooperation agreement<\/strong> with Italy. This includes:<\/p>\n

                \n
              • EU Member States<\/strong> (which apply Directive 2011\/16\/EU<\/strong> on administrative cooperation in taxation).<\/li>\n
              • Countries that have a bilateral tax treaty with Italy<\/strong>, such as:<\/li>\n
              • Double Taxation Agreements (DTA)<\/strong><\/li>\n
              • Tax Information Exchange Agreements (TIEA)<\/strong><\/li>\n
              • OECD Multilateral Convention on Administrative Assistance in Tax Matters<\/strong><\/li>\n<\/ul>\n
                  \n
                1. Holder of a Foreign Pension Income<\/strong><\/li>\n<\/ol>\n
                    \n
                  • \n
                      \n
                    • The applicant must receive a pension from a foreign country<\/strong>, which is not subject to Italian taxation<\/strong> under international tax treaties<\/strong>.<\/li>\n
                    • Both Italian and foreign citizens<\/strong> can apply, but the pension must be paid by a foreign institution<\/strong>.<\/li>\n
                    • Those who receive only a pension from an Italian institution (such as INPS) do not qualify<\/strong> for this benefit.<\/li>\n
                    • However, having both an Italian pension (INPS) and a foreign pension does not exclude eligibility<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n

                      How to Apply for the Foreign Pensioner Tax Regime<\/strong><\/p>\n

                      The application for this tax regime<\/strong> can be submitted directly<\/strong> through the income tax return<\/strong> for the tax period in which the applicant transferred their tax residence<\/strong>.<\/p>\n

                        \n
                      • The option remains valid for 9 additional tax periods<\/strong> after the initial application.<\/li>\n
                      • The scheme has been available since 2019<\/strong> and has a maximum duration of 10 tax years<\/strong>.<\/li>\n
                      • Once the 10-year period expires<\/strong>, the taxpayer\u2019s foreign income<\/strong> will once again be subject to standard Italian income tax (Irpef)<\/strong> and included in their total taxable income<\/strong>.<\/li>\n<\/ul>\n<\/div>\n

                        What is meant by pension income?<\/h2>\n
                        \n

                        First and foremost, it is important to clarify that pension income is equated with employment income<\/strong>. According to Article 49, paragraph 2, letter A) of Presidential Decree 917\/1986<\/strong>, \u201cemployment income includes pensions of any kind and allowances equivalent to them\u201d<\/em>.<\/p>\n

                        Additionally, the Italian Revenue Agency (Agenzia delle Entrate)<\/strong> has specified that the concept of pension includes:<\/p>\n

                          \n
                        • All payments due after the termination of a work activity<\/strong>, even if they stem from a non-employee<\/strong> working relationship (e.g., pension benefits for former self-employed workers<\/strong>).<\/li>\n
                        • One-time indemnities<\/strong> granted due to the payment of contributions<\/strong>, which may be received regardless of employment termination<\/strong> (e.g., lump-sum pension capitalizations<\/strong>).<\/li>\n<\/ul>\n

                          What Is NOT Considered Pension Income?<\/strong><\/p>\n

                            \n
                          • Voluntary insurance policies<\/strong> that are not linked to an employment relationship<\/strong> and do not guarantee the return of the capital paid<\/strong>.<\/li>\n<\/ul>\n

                            How Is Foreign Pension Income Determined?<\/strong><\/p>\n

                            Income is classified as foreign-sourced<\/strong> using a \u201cmirror approach\u201d<\/strong>, meaning it follows the same criteria outlined in Article 23 of Presidential Decree 917\/1986<\/strong>, which determines Italian-sourced income<\/strong> but applied in reverse<\/strong>.<\/p>\n

                            According to this article, for non-residents<\/strong>, an income is considered produced in Italy<\/strong> when it can be linked to a source located within Italian territory<\/strong>. Conversely, foreign income<\/strong> is identified based on the exact opposite criteria<\/strong>.<\/p>\n

                            Income Considered as Foreign-Sourced:<\/strong><\/p>\n

                              \n
                            • Real estate income<\/strong> from land and buildings located abroad<\/strong>.<\/li>\n
                            • Capital income<\/strong> paid by foreign states or non-resident entities<\/strong>.<\/li>\n
                            • Employment income earned from work performed abroad<\/strong>.<\/li>\n
                            • Self-employment income<\/strong> from activities carried out abroad through a fixed base<\/strong>.<\/li>\n
                            • Business income<\/strong> from activities conducted through a permanent establishment abroad<\/strong>.<\/li>\n
                            • Capital gains<\/strong> from the sale of shares in non-resident companies<\/strong>.<\/li>\n
                            • Miscellaneous income<\/strong> derived from activities performed abroad and assets located abroad<\/strong>.<\/li>\n<\/ul>\n

                              Final Considerations on the Foreign Pension Holder Regime<\/strong><\/p>\n

                              The foreign pension holder tax regime<\/strong>, as outlined in Article 24-ter of Presidential Decree 917\/1986<\/strong>, provides an attractive opportunity<\/strong> for foreign retirees looking to relocate their tax residence to Italy<\/strong>.<\/p>\n

                              However, it is essential<\/strong> to fully understand the requirements and implications<\/strong> of this tax legislation before making a decision. It is strongly advised to consult a tax professional or financial advisor<\/strong> to evaluate the most beneficial and suitable solution<\/strong> based on individual circumstances.<\/p>\n

                              Boschetti Law Firm<\/strong>, through its commercial partners<\/strong>, is well-equipped to address these needs<\/strong>, offering a comprehensive package<\/strong> to assist its clients effectively.<\/p>\n<\/div>\n


                              \n<\/p>\n","protected":false},"excerpt":{"rendered":"

                              Tax benefits Foreign pension holders The tax regime for foreign pension holders is a highly relevant topic, not only for Italian citizens but also for foreigners seeking tax benefits in Italy. As we will see below, this benefit is granted to those who establish tax residency in certain designated territories. The regime consists of applying […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":2677,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"footnotes":""},"class_list":["post-2693","page","type-page","status-publish","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.italyvisainvestments.com\/en\/wp-json\/wp\/v2\/pages\/2693","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.italyvisainvestments.com\/en\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.italyvisainvestments.com\/en\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.italyvisainvestments.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.italyvisainvestments.com\/en\/wp-json\/wp\/v2\/comments?post=2693"}],"version-history":[{"count":8,"href":"https:\/\/www.italyvisainvestments.com\/en\/wp-json\/wp\/v2\/pages\/2693\/revisions"}],"predecessor-version":[{"id":5359,"href":"https:\/\/www.italyvisainvestments.com\/en\/wp-json\/wp\/v2\/pages\/2693\/revisions\/5359"}],"up":[{"embeddable":true,"href":"https:\/\/www.italyvisainvestments.com\/en\/wp-json\/wp\/v2\/pages\/2677"}],"wp:attachment":[{"href":"https:\/\/www.italyvisainvestments.com\/en\/wp-json\/wp\/v2\/media?parent=2693"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}