Fancy moving to Italy?
New measures introduced in the Italian 2019 budget are designed to attract people who have sufficient economic resources to be able to contribute to the Italian economy.
From 1 January 2019, any retired immigrants who are not resident in Italy and are in receipt of a pension could be eligible for a 7% flat-rate tax on all their foreign income.
This flat rate tax is not limited to pensions and there is an additional exemption from wealth taxes on foreign assets.
To be eligible:
• The person must not have been tax resident in Italy in the previous five tax years.
• They must have a pension paid by a non-Italian source.
• Jurisdiction paying the pension must have an administrative cooperation agreement with Italy.
• They must become resident in a town with a maximum of 20,000 residents in the regions of Abruzzo, Basilicata, Campania, Molise, Puglia, Sardinia or Sicily.
There is a time limit on this though and foreign pensioners can only benefit from the flat-rate for up to six years from their first tax year of residency, after which they will have to pay standard income tax rates.
Some local authorities are even offering the incentive of selling council owned properties for as little as €1 (although this is subject to certain conditions involving restoration). Additionally, for British pensioners who don’t like the idea of a “Hard Brexit”, cold weather and warm beer it would be possible to apply for a residency visa and move to Italy post Brexit and enjoy the benevolent taxation and some of the finest cuisine and wines in the world.
However, the Italian initiatives will have to improve considerably to beat the Portuguese NHR (non-habitual residency) tax regime that offers for 10 years:
• Tax Free Pension income (drawn down as a lump sum or as a periodic payment, regardless of source.
• Dividends, interest and royalties tax free in Portugal (subject to certain conditions)
• Salary from a high value activity subject to a flat rate of tax of 20%