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TAXES

Did you know: Italy has a special income tax rate for foreign retirees?

With its warm climate and relaxed ways of life, Italy is a dream retirement destination for many. But moving to certain parts of the country can also lead to big savings on your tax bill.

Melfi, Basilicata
A street in Melfi, a small town in Italy's southern Basilicata region. Photo by Johannes Beilharz on Unsplash

Italy is already an extremely attractive destination for foreign retirees for many obvious reasons

But there’s another element that contributes to the appeal: a special flat income tax rate of just seven percent for people with foreign-sourced pensions who choose to retire in certain areas of the country.

READ ALSO – Retirement in Italy: What you need to know about visas and residency

First introduced in 2019 in a bid to repopulate areas of southern Italy following decades of emigration north or abroad, the flat tax rate has since garnered a lot of interest worldwide – and it’s easy to see why.

If you meet the necessary requirements, the seven-percent rate doesn’t apply just to your pension income but to all foreign earnings, such as rental income and dividends overseas.

This can equate to substantial savings considering that Italy’s personal income tax (or Irpef) ranges from 23 to 43 percent depending on your earnings bracket.

There are three main requirements that need to be met in order to qualify for the special flat rate, with the main one being that you must receive a private or public pension from another country.

You also can’t have been a legal resident of Italy at any time in the previous five years. This means that if you’re already living elsewhere in the country, you can’t move to benefit from the low rate.

Finally, you must settle in a town with no more than 20,000 inhabitants. There’s no official list of these, but almost all of the eligible towns are in one of the following regions: Abruzzo, Basilicata, Calabria, Campania, Molise, Puglia, Sardinia, or Sicily.

For more details on who’s eligible and how to apply, see our Q&A on Italy’s low tax rate for retirees here.

Member comments

  1. This is v interesting but what qualifies as a town of over 20,000 ?. We have a home in a commune with over 30,000 inhabitants but we live several miles from the centre “nucleo” and I think the house is qualified amongst ‘case sparse’ . It’s quite isolated. Does anyone know if this is worth looking into further? I accept that we would need to talk to the commercialista to pursue this but just wondering about the town size criterion.

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For members

SHOPPING

When do Italy’s sales start in summer 2024?

As retailers around Italy prepare for their big summer sales in the coming weeks, here are this year’s dates for 'saldi' in each region.

When do Italy's sales start in summer 2024?

Retailers in Italy are allowed just two big saldi, or sales, a year – one in the summer, one in the winter.

The practice aims to boost consumption and give vendors a chance to shift stock from the previous season while ensuring an even playing field between competitors.

The custom actually dates back to the Fascist era, having first been introduced via a 1939 law. 

It was then scrapped for about four decades after the collapse of Mussolini’s regime, but was brought back in an updated form in 1980.

In 1997, the law was revised to hand autonomy over to individual regions, which is why the length of the summer sales season varies from region to region.

Though Italy’s saldi estivi can go on for over two months in some cases, they run for at least month in all parts of the country, meaning you’ll have plenty of time to pick up a bargain regardless of where in Italy you live.

Here are the official 2024 dates for each Italian region:

  • Abruzzo: July 6th-September 3rd
  • Basilicata: July 6th-September 6th
  • Calabria: July 6th-September 4th
  • Campania: July 6th-September 3rd
  • Emilia Romagna: July 6th-September 3rd
  • Friuli Venezia Giulia: July 6th-September 30th
  • Lazio: July 6th-August 17th
  • Liguria: July 6th-August 19th
  • Lombardy: July 6th-September 3rd
  • Marche: July 6th-August 31st
  • Molise: July 6th-September 3rd
  • Piedmont: July 6th-August 31st
  • Puglia: July 6th-September 15th
  • Sardinia: July 6th-September 3rd
  • Sicily: July 6th-September 15th
  • Tuscany: July 6th-September 3rd
  • Umbria: July 6th-September 3rd
  • Veneto: July 6th-August 31st
  • Valle d’Aosta: July 6th-September 30th

You may have noticed that the Trentino-Alto Adige region is missing from the above list.

That’s because the autonomous provinces of Trento and Bolzano decide their own sales periods independently from the rest of the country, with start and end dates often varying by municipality (or comune).

To see the dates for this year’s summer sales in each Bolzano comune, visit this website.

How much of a discount can I expect?

Discounts usually start at around 20 to 30 percent of the original price, but can climb as high as 70 percent.

Shops are required to display both the original and discounted prices, so you should know exactly how much of a bargain you’re getting.

Italian law states that the items on sale must only come from the season just gone, rather than being stock that’s been sitting on the shelves for months, though the rule is hard to enforce.

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