Taxability of a German social security pension paid to a retiree residing in Italy who holds Italian citizenship, as certified by the Neubrandenburg Tax Office

German Social Security Pensions: Taxation Exclusively in Italy on the Portion Taxable Under German Law for Italian Citizens Previously Resident in Germany

In Ruling No. 164/2026, the Italian Revenue Agency clarified the tax treatment of German social security pensions received by Italian citizens residing in Italy. Where the requirements laid down by the Italy–Germany Double Taxation Convention are met, Italy may tax only the portion of the pension that would be taxable under German law, thus excluding the portion certified as tax-exempt by the German tax authorities.

The case

The case concerns an Italian citizen who is tax resident in Italy and receives a pension paid by the German social security institution, arising from mandatory contributions paid during a previous period of employment in Germany.

The Neubrandenburg Tax Office certified the portion of the pension that is exempt from taxation under German law. The taxpayer asked whether this amount could be excluded from the taxable pension income to be declared in Italy.

The applicable treaty provisions

Under Italian law, pensions received by an individual who is tax resident in Italy, including pensions from foreign sources, generally contribute to their taxable income.

However, the provisions of the Double Taxation Convention between Italy and Germany, which prevail over domestic legislation, must also be considered.

For German social security pensions received by an Italian citizen residing in Italy, the Convention grants exclusive taxing rights to Italy by applying the principle of exclusive taxation in the taxpayer’s State of residence. However, where the Italian pensioner was previously resident in Germany, paragraph 14(e) of the Additional Protocol to the Convention provides that Italian tax must be levied only on the amount that would be taxable under German law.

Conversely, where a German social security pension is received by an individual residing in Italy who holds German citizenship but not Italian citizenship, the pension is taxable exclusively in Germany as the source State.

The mutual agreement between Italy and Germany

This principle was further clarified by the mutual agreement concluded between Italy and Germany in November 2025, effective from 1 January 2025.

The agreement establishes that the pensions concerned are taxable exclusively in Italy and only to the extent that they would be taxable under German law.

For this purpose, the Neubrandenburg Tax Office issues pensioners with a specific “one-time certificate” that may be submitted to the Italian tax authorities and indicates the portion of the pension that is exempt under German law.

The clarification provided by the Italian Revenue Agency

The Italian Revenue Agency therefore confirmed that the portion of the pension certified as tax-exempt in Germany must not be subject to taxation in Italy.

Accordingly, a taxpayer residing in Italy must declare only the portion of the pension that would be taxable under German law, provided that the taxpayer is an Italian citizen and was tax resident in Germany before relocating to Italy.