Taxes for Expats
Information and links to help you understand and plan for Italian taxes.

There is a program for expats moving to Italy who receive pension and other passive income to only pay a 7% tax. It lasts for a ten year period. No catches, this is an excellent program. Click the Icon for the Document
This guide, while dated, contains a lot of information for what you need to do if you are going to want to do things like rent out your house and the registrations you would need to do.
Click the Icon to open a document that gives a summary of taxes in Italy. It mostly covers people who work in Italy. I cover the subjects of interest specifically to retired people in the rest of this post.
Click the Icon to open the IRS page containing the US-Italy Tax treaty. You will of course want the 1999 version and the Technical Explanation gives more in depth detail
Click the link to see an ebook guide about all the various in's and out's for filing your U.S, Tax returns while you are an expat in Italy.
The foreign tax credit form is the primary method to avoid double taxation for those receiving only pension, social security or other passive income. This document has full walkthroughs with examples. The section on Passive Income is in the second half.
Primarily this page and guides are for retired Americans who have arrived in Italy on Elective Residence Visa’s. Much of the information regarding who has to pay and the tax rates are applicable to most people however. As Americans, you are in the rather unique situation of having to pay taxes to both Italy and the Unites States.
Anyone who has earned income (income from working) will be taxed on the income they earn while working in Italy. This applies from day one, Euro one. Working in Italy also includes remote work. To be clear, even if you are working for a non Italian company and getting the money deposited into a non Italian bank account, you are considered working in italy if you are physically in Italy while doing the work. This applies from day one, no matter what type of visa you are on. [Lets be reasonable though. No one is going to chase you down if you deal with work emails and tidy up some loose ends while in Italy on vacation.] There is such a thing as a Digital Nomad Visa, but Italy is not yet part of the handful of EU countries that offer this.
The key figure to remember is: 183 days in a Calendar Year. Anyone who spends more than 183 days in Italy must pay tax on their Worldwide Income. Because things vary from region to region, I know there are some (mostly pre-Brexit Brits) who have resident cards, but spend less than 183 days in Italy. I only mention this because a resident card is not a trigger for tax liability. It is triggered by physical presence. (There are a couple other triggers, but they have to do with more obscure events like center of economic interest and other things that would apply only to people with much more complicated situations.)
When you are a Tax Resident (in Italy more than 183 days) you will pay tax to Italy on your worldwide income. Because this guide is targeted to expats who are retired and here on an Elective Residence visa, we will be discussing only Passive Income. (Income not coming from doing work.)
In particular, if the income deriving from the rented real estate owned outside of Italy is subject to foreign rental income taxes in the foreign country, the same taxable base utilized in the foreign tax return is subject to taxation also in Italy. This income is then included in the Italian ordinary taxable base and taxed at progressive tax rates.
In this case, the taxpayer is entitled to claim for the foreign tax credit in the Italian tax return in order to avoid double taxation (if any). The said deduction is limited to the proportion of the Italian tax corresponding to the ratio between the taxable income produced abroad (and subject to double taxation) and total income. The foreign tax credit cannot, in any case, exceed the net Italian tax due on the foreign source income.
Tax residents in Italy will pay a tax on their Foreign Assets. This is for Real Property and for Financial Products.
Italy Wealth Tax — Link to Web Page
For Real Property the amount is .76% of the price you purchased the property for, or the market value. (Example if you have a house worth $250,000, the amount would be $1,900) —- The applicable tax rate, starting from FY 2024, is equal to 1.06% (up to FY 2023, the tax rate was 0.76%).
For Financial Products the amount if .2% of the following types of assets.
Common banking accounts are taxed at a flat amount of 34.20Euro
Occupational Pension Accounts are exempt. (This would seem to include IRA’s)
A 7% flat tax on all income for all pensioners (regardless of nationality) who:
The regions are: Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise, Puglia
Additionally people who use this program are exempt from the wealth taxes. The program will last for ten years. CLICK FOR PDF