Taxation of pensions received from other EU countries

Latest update: 12/12/2020

Any person who has income generated in Italy, even if resident abroad, is required to declare it in Italy, except in cases of exemption expressly provided for by law.

As a general rule, pensions paid to persons not resident in the Italian State, by resident institutions or by permanent establishments in Italy are taxable in Italy. Non-residents required to submit their tax return in Italy must use the Personal Income Form.

Double taxation conventions

Double taxation conventions are in force with some countries and each Contracting State identifies its own tax residents on their basis. The double taxation conventions generally provide that pensions paid to non-resident nationals are taxed differently depending on whether they are receiving a public or private pension. In order to check the tax regime applicable to the relevant social security arrangements, the text of each double taxation convention in force is available on the website of the Department of Finance(IT) .

A pensioner residing abroad may apply to the withholding agent for the application of double taxation conventions in force, in order to ensure the pension is disregarded for taxation (only taxed in the country of residence), or to apply the more favourable of the stated tax arrangements, such as taxation in Italy only above certain income thresholds.

In such cases, the pensioner residing abroad will have to ask the withholding agent not to deduct all or part of Italian tax payable on pensions and/or other similar remuneration at source.

How to claim a tax refund

For the refund of Italian tax relating to previous years, persons not resident in Italy who consider that they can rely on a double taxation convention in order to ensure all or part of their income is disregarded for taxation purposes may send a request for reimbursement of the taxes already withheld to the Revenue Agency - Pescara Operating Centre - Via Rio Sparto 21, 65100 Pescara, within 48 months of the date on which the tax was levied (Articles 37(IT) and 38(IT) of Presidential Decree No 602/1973).

The application must contain a certificate of residence for tax purposes in the foreign country issued by the competent tax authority and a declaration of the existence of any other specific conditions laid down in the Convention.

Persons not resident in Italy are also obliged to pay regional and municipal personal income tax (Irpef) surcharges payable on pensions and/or other similar remuneration if, in the reference year, Irpef is due after subtracting all the deductions and tax credits for income generated abroad, which has been definitively withheld.