The Budget Law 2019 (Law No. 145/2018 – Art. 1, paras. 273 – 275) approved incentives for those individuals (non resident) in Italy who receive a pension provided by foreign legal entities and choose to move to certain regions in the south Italy.
This Law allows them to subject their foreign income to a 7% flat tax; This tax must be paid in a lump sum by the deadline for paying the balance of income tax.
Currently, there are 10 (ten) tax periods affected by the measure, during which the retiree will also be exempt from submitting the RW panel of the Unico form, in which foreign financial assets and investments held by individuals residing in Italy are declared to the Italian tax authorities. Furthermore, the “new resident”/applicant and is exempted from paying IVIE, the tax on real estate investments abroad, and IVAFE, the tax on the value of assets (movable goods) abroad, which normally burden Italian residents (individuals) holding current accounts, financial products, and savings accounts abroad.
The jurisdiction where the last tax residence was located must be indicated so that the Internal Revenue Service can forward the request to the tax authorities of the jurisdiction in question. The option must be expressed in the tax return for the tax period in which residence in Italy is transferred and is renewable, for five years, from that period. It can also be revoked without prejudice to the effects already obtained in previous tax periods.
LEGAL REQUIREMENTS:
1) Individuals
- Non-resident, foreign pensioners
- Italians residing abroad.
In addition, it is required:
- non-tax residence in Italy in the five tax periods preceding the one in which the new tax benefits would be activated;
- having had, until the time of the change, previous residence in countries with which administrative cooperation agreements with Italy are in force;
- be holders of pensions abroad
2) Territory
The Italian Regions eligible for this fiscal regime are: in Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise and Apulia, and in particular those Municipalities with less than 20,000 inhabitants. Alternatively, those municipalities with a maximum of 3,000 inhabitants, affected by the earthquakes that took place on 24th of August, 26th and 30th of October in 2016 and 18th January 2017( mainly from among those in Marche, Umbria, Abruzzo and Lazio).
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