Moving to Italy: Italy's flat tax for pensioners and can you work with an elective residency visa?
Moving to Italy, a country infamous for its red tape, can seem like a daunting task. Our new newsletter is here to answer your questions - this time we're looking at how many people benefit from Italy's flat tax for pensioners and whether you can work on Italy's elective residency visa.
Here at The Local we're an international team living in Italy - which means we've either grown up navigating Italian bureaucracy or been through the simultaneously exciting and nerve-wracking process of moving countries.
Our new newsletter is aimed at people who are in the process of moving, have recently moved and are still grappling with the paperwork or perhaps are just thinking about it - and we'll share a regular selection of practical tips. Our team is also available to answer questions from subscribers to The Local.
Who benefits from Italy's flat tax rate for pensioners?
Since 2019, Italy has offered a special tax rate of just seven percent for people who retire in certain parts of the country on a foreign pension.
You might assume that the vast majority of Italy's foreign retirees, of whom there are many, would jump at this offer - but the strict entry requirements mean that many pensioners don't meet the government's criteria.
To be eligible, retirees must live in a town of fewer than 20,000 inhabitants in one of eight southern regions, have a foreign-sourced pension, and have lived outside Italy for the previous five years.
It's perhaps unsurprising, then, that the latest data from Italy's Department of Finance reveals that fewer than 500 people are taking advantage of the seven-percent tax rate, with just 474 people declaring a foreign pension under the scheme on their 2023 tax returns.
If you're interested in benefitting from the flat tax rate, you can learn more about the requirements here.
Does Italy's elective residency visa allow you to work?
Italy's elective residency visa (ERV) is the smoothest path to Italian residency for many non-EU nationals without close family ties to Italy, Italian ancestry or a job offer.
At a minimum income requirement of €31,000 per person per year or €38,000 for married couples, it doesn't require vast reserves of wealth, and there are few other strict barriers to entry.
Unfortunately for those of working age, one of those barriers is that you can't work once you arrive in Italy on the ERV. The government is clear that all your income must be passive - and if you do get caught working while on the visa, you risk being kicked out of the country.
That means it's mostly retirees over 60 who end up benefitting from the scheme. You can learn about the best ways to set yourself up for a successful ERV application here.
Questions
The Local's Reader Questions section covers questions our members have asked us and is a treasure trove of useful info on all kinds of practical matters. If you can't find the answer you're looking for, head here to leave us your questions.
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Here at The Local we're an international team living in Italy - which means we've either grown up navigating Italian bureaucracy or been through the simultaneously exciting and nerve-wracking process of moving countries.
Our new newsletter is aimed at people who are in the process of moving, have recently moved and are still grappling with the paperwork or perhaps are just thinking about it - and we'll share a regular selection of practical tips. Our team is also available to answer questions from subscribers to The Local.
Who benefits from Italy's flat tax rate for pensioners?
Since 2019, Italy has offered a special tax rate of just seven percent for people who retire in certain parts of the country on a foreign pension.
You might assume that the vast majority of Italy's foreign retirees, of whom there are many, would jump at this offer - but the strict entry requirements mean that many pensioners don't meet the government's criteria.
To be eligible, retirees must live in a town of fewer than 20,000 inhabitants in one of eight southern regions, have a foreign-sourced pension, and have lived outside Italy for the previous five years.
It's perhaps unsurprising, then, that the latest data from Italy's Department of Finance reveals that fewer than 500 people are taking advantage of the seven-percent tax rate, with just 474 people declaring a foreign pension under the scheme on their 2023 tax returns.
If you're interested in benefitting from the flat tax rate, you can learn more about the requirements here.
Does Italy's elective residency visa allow you to work?
Italy's elective residency visa (ERV) is the smoothest path to Italian residency for many non-EU nationals without close family ties to Italy, Italian ancestry or a job offer.
At a minimum income requirement of €31,000 per person per year or €38,000 for married couples, it doesn't require vast reserves of wealth, and there are few other strict barriers to entry.
Unfortunately for those of working age, one of those barriers is that you can't work once you arrive in Italy on the ERV. The government is clear that all your income must be passive - and if you do get caught working while on the visa, you risk being kicked out of the country.
That means it's mostly retirees over 60 who end up benefitting from the scheme. You can learn about the best ways to set yourself up for a successful ERV application here.
Questions
The Local's Reader Questions section covers questions our members have asked us and is a treasure trove of useful info on all kinds of practical matters. If you can't find the answer you're looking for, head here to leave us your questions.
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