What is Italy's 7% flat tax?

A flat 7% substitute tax on all foreign-sourced income (pensions, dividends, capital gains, foreign rent) for foreign pensioners who move their tax residence to a small town in southern Italy. It is set in art. 24-ter of the Italian tax code. General information, not tax advice.

How long does the 7% regime last?

Italy's tax authority describes it as nine tax periods of validity — the year you move plus the following years, up to roughly ten years in total. Then ordinary taxation applies.

Does Collesano qualify for the 7% flat tax?

Yes. It is in Sicily (an eligible region) with ~3,600 residents, well under the population cap (raised to 30,000 in April 2026, previously 20,000). You must register residence in the comune and meet the other conditions.

Who is eligible for the 7% pensioner tax?

Someone with a foreign-paid pension, who moves to a qualifying southern town under 30,000 people, who was not an Italian tax resident in the prior five years, and whose former country exchanges tax information with Italy (EU/EEA and most treaty countries).

How do I apply for the 7% flat tax?

You elect it in your Italian tax return for the year you become resident — there is no separate advance application. Declare your prior non-residence, last country of residence and pension source. Use an Italian accountant; complex cases can request an interpello ruling.

For foreign retirees

Italy's 7% flat tax for foreign retirees — and why Collesano qualifies

If you're a foreign pensioner, Italy has one of Europe's most generous tax deals: a flat 7% on all your foreign income for up to a decade — but only if you move to a small town in the south. Collesano qualifies. Here's how the regime actually works, straight from the tax authority, including the 2026 change most articles haven't caught up with. This is general information, not tax advice — confirm your own case with an Italian accountant.

What the 7% regime actually is

Under Italy's art. 24-ter regime, a new foreign-pensioner resident pays a flat 7% substitute tax on all income produced abroad — not just the pension, but foreign dividends, capital gains and rental income too. Income earned inside Italy is taxed normally. As a rough example, a €60,000 foreign pension would owe about €4,200 a year under the 7% regime, versus €21,000 or more under ordinary Italian income tax.

How long it lasts

The option covers the year you move plus the years that follow — the tax authority describes it as nine tax periods of validity (so up to roughly ten years in total). After that, you move to normal Italian taxation.

Who qualifies

You receive a pension paid from abroad — that is the entry ticket, and the 7% then covers your other foreign income too.
You move your tax residence to a town in one of eight southern regions: Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise or Puglia (plus some central-Italy earthquake municipalities).
That town has no more than 30,000 inhabitants — raised from 20,000 on 7 April 2026.
You were not an Italian tax resident in the previous five years.
Your former country exchanges tax information with Italy — EU/EEA states and most treaty countries qualify.

Why Collesano fits

Collesano is in Sicily — an eligible region — with about 3,600 residents, far under either the old 20,000 or the new 30,000 cap. It qualified before the 2026 change and still does. The condition people forget: you must actually register your residence (anagrafe) in the comune and meet every other condition — qualification is by your town of registered residence, not just where you own property.

How you claim it

There is no separate advance application. You elect the regime in your Italian tax return (dichiarazione dei redditi) for the year you become resident, declaring your non-residence for the prior five years, your last country of tax residence, the country paying your pension, and any foreign states you choose to leave out. For complex cases you can request an advance ruling (interpello) from the Agenzia delle Entrate. Use a qualified Italian accountant (commercialista).

What will life here cost?

The tax break is only half the picture. See our honest breakdown of the real monthly cost of living in Collesano — rent, food, utilities, healthcare.

Read: the cost of living in Collesano

Common questions

What is Italy's 7% flat tax?
A flat 7% substitute tax on all foreign-sourced income (pensions, dividends, capital gains, foreign rent) for foreign pensioners who move their tax residence to a small town in southern Italy. It is set in art. 24-ter of the Italian tax code. General information, not tax advice.
How long does the 7% regime last?
Italy's tax authority describes it as nine tax periods of validity — the year you move plus the following years, up to roughly ten years in total. Then ordinary taxation applies.
Does Collesano qualify for the 7% flat tax?
Yes. It is in Sicily (an eligible region) with ~3,600 residents, well under the population cap (raised to 30,000 in April 2026, previously 20,000). You must register residence in the comune and meet the other conditions.
Who is eligible for the 7% pensioner tax?
Someone with a foreign-paid pension, who moves to a qualifying southern town under 30,000 people, who was not an Italian tax resident in the prior five years, and whose former country exchanges tax information with Italy (EU/EEA and most treaty countries).
How do I apply for the 7% flat tax?
You elect it in your Italian tax return for the year you become resident — there is no separate advance application. Declare your prior non-residence, last country of residence and pension source. Use an Italian accountant; complex cases can request an interpello ruling.

Official sources

More Collesano guides

General information based on the Agenzia delle Entrate's official guidance (June 2026), written by a Collesano resident — not tax or legal advice. Tax rules change and depend on your situation; confirm with a qualified Italian accountant (commercialista) before acting.

Last updated June 2026

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