The 2,344 towns where Italy taxes your pension at 7%

The 7% tax: questions people ask

What is the 7% flat tax in Italy?

A regime for pensioners who move to Italy: all foreign-sourced income — pensions, and other foreign income such as rent or dividends — is taxed at a flat 7% instead of Italy's normal progressive rates, for up to nine years.

Which towns qualify for the 7% tax in Italy?

Comuni with 20,000 residents or fewer in the eight southern regions: Abruzzo, Basilicata, Calabria, Campania, Molise, Puglia, Sardinia and Sicily. By ISTAT's latest figures that is 2,344 comuni, all listed on this page.

Who is eligible for the 7% tax regime?

You must receive a pension from a foreign source, must not have been tax-resident in Italy in the five tax years before the move, and must transfer your tax residence to a qualifying comune. It is elected on your first Italian tax return.

Does the 7% tax apply to all income?

It covers income produced abroad. Income produced in Italy — renting out an Italian property, for instance, or working in Italy — is taxed at the normal Italian rates.

How long does the 7% tax last?

For the year you move and the following nine tax years, provided you keep your residence in a qualifying comune and do not opt out.

Is retiring to Italy tax free?

No, but the 7% regime is as close as Italy comes: a flat 7% on foreign income with no further regional or municipal surcharges. Check with an Italian commercialista how it interacts with the tax rules of the country paying your pension.