Gtres
Gtres

Italy wants to attract pensioners and is determined to compete with countries like Portugal and Spain when it comes to retirees moving there. Let's see what the new Italian tax regime for senior citizens is, who exactly it is aimed at and how long it lasts.

The new preferential tax regime in Italy provides for a minimum taxable rate of 7% on pension income from foreign sources and on any other foreign source income into the country. It is targeted at those who have been a taxpaying resident in another country that’s not Italy for at least 5 years before moving there, and who attain residency in the regions of southern Italy: Abruzzo, Basilicata, Calabria, Campania, Molise, Puglia, Sardinia and Sicily, and in other municipalities with less than 20 thousand inhabitants. The new scheme is scheduled to be in force for the 2019 tax period.

The new regime also exempts people who retire to Italy from the need to indicate foreign activities and investments in their annual income tax returns and annual wealth taxes on foreign real estate and foreign financial activities. However, it has a duration of just 5 years from the moment you register your transfer of residence to Italy.

Paolo Ludovici, founder and partner of Studio Ludovici & Piccone Partners, explained to the Italian daily newspaper La Stampa that "this new regime represents an opportunity for all those who have not been resident in Italy for at least 5 years and who receive pension income in addition to other foreign income such as financial income, rents, and so on. The actual convenience must obviously be assessed on a case-by-case basis, taking into account the asset/income situation, the family context and the country of origin."

However, Ludovici also pointed out that, in order for the measure to have results, important assurances about the stability of the system and adequate services are required. Not only that, but it is also essential to put in place specialised operators who are able to facilitate the transfer of residence and the handling of various bureaucratic formalities.

Nonetheless, this new tax scheme for 2019 is sure to attract more foreign expats to retire to Italy, and 2019 is likely to see a rise in the number of over 60s living and buying property in Italy.

From the original Italian article: Imposte al 7% per attrarre i pensionati. L’Italia fa concorrenza al Portogallo (La stampa)