Personal income tax rates and relief

Latest update: 12/12/2020

For non-national pensioners, the standard progressive taxation with the relevant rates applies to income generated in Italy.

Optional scheme for non-national pensioners

From 1 January 2019, pensioners residing abroad who move their residence to certain municipalities of the Centre and South Italy can benefit from the optional scheme for non-national pensioners(IT), which provides for a substitute tax of 7% on all income generated abroad.

Specifically, the municipalities involved in the scheme are:

• municipalities with fewer than 20 000 inhabitants in Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise and Apulia
• municipalities listed in Annexes1(IT), 2(IT) and 2-bis(IT) to Decree Law No 189/2016.

Pensioners who have not been resident for tax purposes in Italy during the five tax years prior to the one in which the option becomes effective and who transfer their residence from countries with which administrative cooperation agreements are in force, which include the other EU countries with which Italy has signed a double taxation convention, a TIEA — Tax Information Exchange Agreement, countries that are signatories to the OECD - Council of Europe Convention on Mutual Administrative Assistance in Tax Matters, may benefit from the tax relief. Lists of Conventions and Agreements are available on the Finance Department website(IT).

For further information, consult the factsheet Optional scheme for non-national pensioners(IT).