Southern Italy 7% tax regime for pensioners: Disadvantages?

Sailorman

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Jul 7, 2023
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I am dual citizen who plans to relocate to Italy for the 7% tax regime for pensioners who reside in southern Italian comune with less than 20,000 population. With my circumstances and Italian citizenship, it suits me well. I've already consulted Italian tax expert and understand the details. I have minor freelancer business income so that's not big factor for me. I have OK place to live. I would be content with the deal and not try to evade. (For those interested, the 7% rate applies to all foreign income including capital gains, but Italian-source income is taxed at normal rate. Also, the regime exempts qualifying persons from the requirement to declare worldwide assets and pay wealth tax. Note: this is complete separate program from the flat tax or other special Italian tax programs.)

My question is whether there are major disadvantages I'm not considering, such as:
(1) Italian tax Agenzia delle Entrate can be fiercely irrational years in the future when one must pay whatever they demand. BUT I assume the Agenzia has incentive to be somewhat fair in order to attract more persons to live in Italy under this regime. My competent Italian tax advisor tells me to keep good records and not worry.
(2) The government may change the terms in the future. BUT either persons already under the regime may be grandfathered, or I'm prepared to leave Italy if necessary.
(3) Business services performed by me in Italy for foreign clients may be considered Italian-source income and therefore incur normal tax rate and various bureaucratic hassles. BUT I can live with that, or leave if it becomes onerous.

I'm not asking if Italy is a good place to live generally, which is a separate question I've already answered for myself without romantic notions. Plus, I will visit other countries sometimes. Thank you.
 
If you really want to move to Italy for your own reasons, and despite all the advice given by many members of OCT to run away from the EU, then on paper this tax regime seems a good choice.
But be prepared to fight with AdE sooner or later, because they will find some way to harass you. Find a good tax lawyer and set aside a legal expenses fund.
 
Are you aware that this regime only lasts for 10 years?
Yes. Grazie, Despina.
...despite all the advice given by many members of OCT to run away from the EU, then on paper this tax regime seems a good choice....
Grazie, Johnny. While in Italy I will keep researching next steps and be prepared to move on.