Who can qualify?

The regime is intended for individuals receiving qualifying pension income from a foreign source who transfer their tax residence to Italy.

Among the main requirements, you must generally:

• receive qualifying pension income paid by a foreign entity;
• have been tax resident outside Italy for the five tax years preceding the move;
• move from a country with which Italy has administrative cooperation arrangements;
• transfer your tax residence to an eligible Italian municipality.

Not every pension or retirement-related payment necessarily qualifies. The nature and source of the pension should therefore be considered before relying on the regime.

Where can you live?

The regime is available when tax residence is transferred to an eligible municipality in:

Sicily · Calabria · Sardinia · Campania · Basilicata · Abruzzo · Molise · Puglia

It can also apply to certain municipalities affected by specified earthquakes.

Under the rules currently in force, the relevant municipality must generally have a population of no more than 30,000 inhabitants. The population threshold was increased from 20,000 to 30,000 with effect from 7 April 2026.

The eligibility of the municipality should therefore be checked before choosing where to establish tax residence.

What is taxed at 7%?

One of the most important features of the regime is that the 7% substitute tax is not necessarily limited to the foreign pension itself.

Subject to the applicable rules, the regime can cover qualifying foreign-source income. This may include, for example, income from foreign property, investments and financial assets, as well as certain other income arising outside Italy.

Italian-source income remains subject to the ordinary Italian tax rules.

This distinction can be particularly important for retirees who continue to hold investments, property or other income-producing assets outside Italy.

How long does the regime last?

The regime can apply for a total of ten tax years, beginning with the tax year in which the option becomes effective.

The option is exercised through the Italian income tax return for the year in which tax residence is transferred to Italy.

What about foreign assets?

During the years in which the regime applies, qualifying taxpayers are exempt from certain Italian foreign asset reporting and wealth tax obligations, including:

RW reporting · IVIE · IVAFE

This can be an important consideration for individuals who continue to own property, bank accounts, investments or other assets outside Italy after becoming Italian tax resident.