Taxes in Italy : How Foreign Pensions are (really) taxed

Retiring from work and moving to Italy could sound like a dream to you.
And the tax incentives for people in the Souther regions of Italy could be a no brainer for a lot of people.
Learning the difference between gov and private pension, how those are treated in Italy can decide your future.
Let's give some clarity !
#movetoitaly #taxesinitaly #ItalyTaxGuide #ExpatTaxItaly #TaxTipsItaly #MovingtoItalyTax #ItalyTaxInsights
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Moving to Italy or already here? Do you have a tax related question you're still struggling with? Stop surfing around!
We're here to share information about tax incentives, obligations and deadlines for tax payers in Italy
Let us know if you want to see more like this in the comments below.
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[@DavidWilliams-qr5yj]

I love Italy. But this is why I only visit for 90 days a year. I don't want to become a tax resident.. I also reside ninety days a year in vietnam and one day less than six months a year in thailand. That way i'm only required to pay capital gains the u s a.

[@StudioRigo]

Smart choice to stay away from the Italian radar 😄

[@sunmand6136]

David, wouldn't you as an American qualify for the dual tax treaty exemption as far as as capital gains are concerned in Italy. Meaning Since the first 53,500 of your capital gains (assuming that is your only income) are taxed at zero. Wouldn't that qualify as taxed already in the U.S ?

[@StephenSmith-ge1qf]

It's a very confusing situation. I'm British, resident in Italy with 2 pensions (both very ungenerous). My UK state pension is taxed in Italy under the double taxation arrangements, but my Civil Service pension cannot be taxed except in the UK under the withdrawal agreement. I don't have to pay towards the national healthcare system as I have a pre-Brexit S1 certificate so it's covered by the UK government under the regulations for UK pensioners.. Investments are subject to CGT in Italy, though they're in the UK. My late mother's estate was subject to UK tax rules as she was a UK resident and the estate was entirely in the UK. I pay a commercialist every year to sort this out for me as the Italian tax declaration form appears to be written almost entirely in the equivalent of hieroglyphics and is utterly incomprehensible.

[@StudioRigo]

We agree that it looks like Italian rules are really far from being clear and transparent

[@lindawalker6657]

Why is the UK state pension taxed by Italians when it is so little as it is this now puts me off looking at Italy

[@lindawalker6657]

Yes me too why are they taxing a pension that's so low Spain don't tax oensions

[@Pete-rs4yz]

I watched the video, and I still don't know how my pension would be taxed.

[@StudioRigo]

What kind of pension are you receiving? Gov or Private? Your citizenship?

[@alissabender5141]

​@@StudioRigoI am a dual US/Italian citizen and my husband is just a US citizen. He will have a state pension from his years as a teacher. Would his pension be taxed?

[@StudioRigo]

Unfortunately dual citizenship costs a lot (tax wise). In his case his pension could benefit from the art. 19 exemption

[@williamlenihan7536]

Can you please consider this question? I am a dual-citizen (USA, ITALY) but I do not yet live in Italy. I would like to retire in Italy, to take residency - and I will have both Social Security income and my 403B (like 401k) income. How will taxation work in this case?

[@StudioRigo]

Thanks for your question. Generally speaking, due to the dual citizenship, both should be taxed

[@williamlenihan7536]

@@StudioRigo Thank you for the response. And so, I will be double-taxed in this case (taxed by USA, and also by Italy)?

[@StudioRigo]

No, there is the foreign credit given 👍🏻

[@williamlenihan7536]

@@StudioRigo OK, grazie ancora - Le tue informazioni sono di grande aiuto.

[@carlredmond3642]

Per Article 18 of USA/Italy Tax Treaty, USA Pensions (other than State or local government originated) and Social Security Payments paid to American resident of Italy will "only" be taxed in Italy..."ARTICLE 18 Pensions, Etc. 1. Subject to the provisions of paragraph 2 of Article 19 (Government Service), pensions and other similar remuneration beneficially derived by a resident of a Contracting State in consideration of past employment shall be taxable only in that State. 2. Payments made by a Contracting State under provisions of the social security or similar legislation of that State to a resident of the other Contracting State shall be taxable only in the other State.".....Assuming the recipient of this pension and social security income is in the Italian 7% program, does this mean that they just pay 7% on the income to Italy, and do not have to pay additional income tax to the USA on this income over and above the 7% paid to Italy since this income is cited in the Tax Treaty as "only taxed" in the other ( non USA) Country ?

[@debsmith7120]

I would very much like to retire to Italy. I will have both US Social Security, and a small municipal pension. Also a small 401k. My husband has a retirement pension from the US Military. Is this sufficient information for you to let us know what our tax liability would be in Italy? Thank you very much!

[@StudioRigo]

We're afraid that's not enough context. However the military and the municipal pensions could benefit from a nice reduction

[@lockedout8643]

So as I understand it my superannuation which is tax free in Australia would be taxed in Italy. That takes the edge off a bit.

[@vettrisenthil]

I worked in Italy as an expat and contributed to INPS. However, I came back to India and no more a resident in Italy. How to take back the contribution ? My nationality is India

[@StudioRigo]

For such a service, we'd recommend speaking with a Patronato

[@Dexterosa]

Thank you ❤️

[@kwaichangcaine8234]

I was born and raised in Ireland but spent most of my working years in the USA so I will have the American social security and a modest self funded retirement account. I don't think I can afford to retire in the USA. I would like to retire somewhere in Italy. I also hold US citizenship. What would you think of my tax situation ? Thank you

[@StudioRigo]

More likely your pension(s) would be considered taxable. Depending on your citizenship and if you worked for any Gov related Employees

[@mastersmurfify]

How about if I am coming from a jurisdiction where there is no income tax and I plan to retire or stay part of the year in Italy?

[@StudioRigo]

Either way you would apply the tax rates on the gross amount. But check first if that income is considered even taxable here

[@Bigizzman01]

Uk has a double tax agreement with Italy if my pansion is zero in the Uk as it's a military pension, would that be reciprocal in Italy?

[@StudioRigo]

It depends on citizenship, contribution history, source of income, past employment relationships and residency

[@Bigizzman01]

Thanks for the reply I meant to put zero tax/tax exempt I was hoping that would be reciprocal

[@StudioRigo]

It's possible

[@mr-vet]

If me and my wife move to Abruzzo (were US citizens), would our government pensions (military pension for me and federal govt pension for my wife) and US social security pensions be taxed in Italy? As a disabled military veteran, I also receive disability payments from the US govt in addition to my pension.

[@StudioRigo]

Good question. Maybe there's a chance you could get some tax exceptions

[@juliafoley5573]

does Italy have allowances and deductions like America does?

[@StudioRigo]

The straight answer is yes. However percentages and allowances are very different (lower)

[@daywalkerdaveclark2694]

What is considered a resident in italy? If i only plan to stay a few months a year will i be taxed?

[@StudioRigo]

Generally speaking, if it's less than 183 days, you shouldn't be considered a tax resident of Italy

[@mr-vet]

Is the image of the couple on the beach Amelia & JP?

[@antoniiocaluso1071]

will Italia be ready for the zillions of new wanna-be immigrants from the USA...IF that wanna-be Mussolini candidate wins in 2024?? you know it'll happen, right? Dang me, but I'd be glad to return to my Pavia, if so, too!! sempre avanti...