Pensioners from abroad, the substitute tax also covers dividends

The facilitated scheme for pensioners (provided for by Article 24-ter of the Tuir) is undoubtedly interesting for the estate planning of persons who hold pension income from a foreign source and who decide to transfer their tax residence to southern Italy. The facility, reserved for those who have maintained their tax residence abroad for at least five tax periods prior to the transfer, provides for the application of a 7% substitute tax on all income of any category produced abroad, for a maximum duration of ten tax periods. The regime also guarantees exemption from the obligation of tax monitoring (RW panel) and exemption from foreign wealth taxes, i.e. Ivie (for real estate) and Ivafe (for financial assets).

With a view to broadening the range of eligible territorial destinations, Article 26, paragraph 1, of Law 34/2026 -the annual SME law, which came into force on 7 April this year - intervened on the demographic requirements for access to the scheme, raising from 20,000 to 30,000 inhabitants the maximum population threshold for municipalities to which it is possible to transfer residence in Abruzzo, Molise, Campania, Apulia, Calabria, Basilicata, Sardinia and Sicily. For the purposes of the threshold, the official ISTAT data on 1 January of the year preceding the first year of validity of the option is relevant. Thus, for 2026, the figure as at 1 January 2025 is relevant.

The substitute of 7% covers income generated abroad, which is identified through the 'mirror' application of the criteria for territoriality laid down in Article 23 of the Tuir: land income from land and buildings located abroad, dividends paid by non-resident companies, capital gains from the sale of shareholdings in non-resident companies, etc.

There is also a decidedly broad orientation regarding the definition of a pension eligible for relief. In fact, even the receipt of a pension paid by Inps is not an obstacle to the facilitated regime, if it is combined with pension income from abroad (see, most recently, reply 471/2022 of the Revenue Agency). There is also the option of not availing of the substitute tax in relation to income generated in one or more foreign States, indicating this when making the option or in the tax return.

Even the reorganisation of the personnel portfolio, with the liquidation of a foreign company, does not preclude access to the benefit. In fact, the Agency (reply 292/2025) clarified that the flat-rate taxation extends to the surplus resulting from the voluntary liquidation of foreign corporations. Pursuant to Article 47(7) of the Consolidated Income Tax Act (Tuir), the amounts transferred to the shareholders upon dissolution of the partnership constitute capital income for the portion exceeding the price paid for the purchase or subscription of the shares or quotas. Since this profit is paid by a non-resident entity, it qualifies as being produced abroad, thus being able to benefit from the optional regime for pensioners with a significant tax saving compared to the ordinary taxation.