A look at Italy’s attractive new tax regimes for inpatriate workers and pensioners

Posted on 3rd January, 2022

Estimated reading time 5 minutes

Back in 2019 and 2020 new, attractive tax regimes were launched for both employees and self-employed workers, and pensioners who transfer their tax residency to Italy. The Covid pandemic somewhat obscured the new regimes as permanent international moves, as opposed to temporary remote working, were blighted by the disruption.

The new regime for inpatriate employees and self-employed workers

The regime offers a 5-year income tax exemption of 70% of Italian sourced income provided that the individuals:
  • have resided abroad for at least 2 years prior to transferring tax residence;
  • mainly perform work activities in Italy;
maintain tax residency in Italy for at least 2 years after their transfer. The available income tax exemption can be:
  1. increased up to 90% of Italian sourced income, if the worker transfers his residency to a region of Southern Italy;
  2. extended for 5 years, with a reduced taxable income of 50%, if the worker (or the spouse, partner or children) purchases a residential property in Italy, or has at least one minor or dependent child. (If the worker has at least 3 minor or dependent children, the tax exemption will be 90% of the Italian sourced income).
The new tax regime is available to the employees or self-employed workers who have transferred their tax residency to Italy after 30 April 2019.

The new regime for inpatriate pensioners

The Italian Government introduced the tax regime applicable to retired individuals who intend to move to Italy from the 2019 tax year.


Under the regime a tax rate of 7% may be applied to foreign incomes derived by a retired individual who moves his or her tax residence to Italy (“Tax Regime for Pensioners”). The Tax Regime for Pensioners applies to retirement income paid by foreign entities as well as to the other foreign income derived by the retiree, provided that such income can be considered as sourced abroad pursuant to Italian income sourcing rules. The retiree may also request that the Tax Regime for Pensioners is not applied to incomes arising from one or more foreign countries. In such a case, the excluded foreign incomes will be subject to the ordinary Italian tax rules and the retiree can claim the Italian tax credit to gain relief from taxes paid abroad on the said foreign incomes, which would otherwise be prevented under Tax Regime for Pensioners. The Tax Regime for Pensioners can be applied for a maximum period of ten years, starting from the year in which the retiree moves his/her tax residence to Italy.


In order to benefit from the Tax Regime for Pensioners, the individual:
  • Must receive a retirement income paid by a foreign entity;
  • Must move his or her tax residence to a municipality with a population not exceeding 20,000 inhabitants located in one of the Regions of Southern Italy (namely, Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise, Puglia), or to a municipality with less than 3.000 inhabitants located in one of the areas hit by the 2016 earthquake, as listed in the Annexes to the Italian Legislative Decree n. 189/2016;
  • Must have been tax resident abroad for at least five years preceding the one in which they move their tax residence to Italy; and,
  • Must have been tax resident in one of the States having an agreement on administrative cooperation in force with Italy.

Find out more

This article was produced by Tommaso Fonti - Head of International Taxation Dept and Chiara Marracino - Global Mobility Dept, at Bacciardi Partners, Italy, a CELIA Alliance member firm. For further information or if you have any queries relating to the content of this communication, please contact us. CELIA Alliance CELIA Alliance members are identified here. Members of the CELIA Alliance are each independent law firms and do not practice law jointly with any other member of the CELIA Alliance. "CELIA Alliance" and "CELIA" are not trading names. For more information about the CELIA Alliance click here. Disclaimer Content is for general information purposes only. The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice. If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances. In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this newsletter. For further legal information click here. Circular 230 disclosure To ensure compliance with requirements imposed by the IRS and other taxing authorities, we inform you that any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Copying If you would like to copy or otherwise reproduce this article then you may do so provided that: (1) any such copy or reproduction is for your own personal use or if it is made available to any third party it is done so on a free of charge basis; and (2) the article is reproduced in full together with the contact details, disclaimer and any logos as they appear on each article.