Flat Tax for Foreign Retirees: one of Europe's most generous fiscal incentives

For up to 10 years, all your foreign income — pension, dividends, capital gains, overseas rental income — is taxed at a flat rate of just 7%. No brackets, no complex calculations. One number.

explore in detail

Everything you need to know

It's been in place since 2019, confirmed unchanged by the 2024 Budget Law, and it applies to exactly the regions where we work: Sicily, Puglia, Sardinia and Calabria. Thousands of foreign retirees, Americans, Britons, Germans, Scandinavians, have already taken advantage of it.

To access the regime, you need to transfer your fiscal residence to a municipality with fewer than 20,000 inhabitants in one of the qualifying southern regions, and you must not have been a tax resident in Italy for the past five years.
There are no nationality restrictions, the regime is open to anyone with a foreign pension.

The regions that qualify are the same ones where we've been helping international buyers find their Italian home for years. If you're already thinking about Sicily, Puglia, Sardinia or Calabria, the fiscal picture is very much in your favour.

Flat rate on all foreign income, pension, dividends, capital gains

10 yrs

Maximum duration, confirmed by
the 2024 Budget Law

<20K

Population limit for qualifying
municipalities in the south

requirements

Who qualifies for the 7% flat tax?

The requirements are clear and straightforward. To access the regime, you need to meet all three of the following conditions:

1. You receive a pension from a foreign source: this includes state pensions (US Social Security, UK State Pension, German Rentenversicherung), occupational pensions, and private pension income paid from outside Italy. Italian state pensions don't qualify.

2. You have not been a tax resident in Italy for the past 5 years: if you've been living and paying taxes outside Italy for the last five years, or you've never been a resident, you qualify. This applies to the vast majority of international buyers approaching Italy for the first time.

3. You transfer your fiscal residence to a qualifying municipality: the municipality must have fewer than 20,000 inhabitants and be located in one of the qualifying southern regions. See the next section for the full list.

locations

Where can you live?

The flat tax applies in municipalities with under 20,000 inhabitants across eight southern Italian regions, including Sicily, Sardinia and Puglia. These aren't obscure locations, many are among the most sought-after destinations in the country.

Sardinia

Much of the island qualifies, particularly inland and northern coastal towns away from the main centres.

Sicily

The most requested region among foreign buyers. Noto, Ragusa, Sciacca, and hundreds of smaller comuni all qualify.

Puglia

Trulli, masserie and stunning coastline. Ostuni, Alberobello, Locorotondo all within the population limit.

the process

How do you apply?

The process is well-established and straightforward when coordinated in the right order. Here's what it looks like step by step.

1. Get your codice fiscale: Italy's tax identification number. You'll need it before opening bank accounts, signing contracts, or filing any documents. We help you get this from the very beginning, it's simple but essential.

2. Transfer your fiscal residence to Italy: register officially at your new Italian address (anagrafe). This must happen within the first year you want the regime to apply. The 10-year clock starts from the year you register.

3. Elect the regime in your first Italian tax return: the flat tax is opted into via your annual Italian tax return. A qualified Italian tax advisor (commercialista) handles this. It renews automatically each year unless you choose to exit.

4. Work with a cross-border tax specialist: particularly important for Americans and anyone with complex income structures. The regime is well-established and your advisor will have handled it many times. We can point you in the right direction.

comparison

Flat tax VS other Italian tax regimes.

Italy has three main fiscal incentives for people relocating from abroad. They're designed for different profiles, here's how to understand which one fits your situation.

Flat tax 7%

Best for: retirees with foreign pension, relocating to the south.
Benefit: 7% on all foreign income.
Duration: 10 years.

Neo-Residenti

Best for: high-net-worth individuals with very large foreign income (>€1M/yr).
Benefit: €200,000 fixed annual tax on all foreign income.
Duration: 15 years.