Skip to content Reply No. 179/2026 SUBJECT: Taxability in the territory of the State of pension payments arising from employment in the private sector, received by a non-resident, pursuant to Article 18, para. 2, of the Convention between the Government of the Italian Republic and the Government of the People’s Republic of China for the elimination of double taxation. [1]
With Reply No. 179/2026, the Italian Revenue Agency (Agenzia delle Entrate) has clarified that an INPS pension received by a person who is tax resident in China is taxable exclusively in Italy where it falls within the Italian public social security system, even if it was accrued entirely through work performed in the private sector. [1]
The decisive criterion is therefore not the public or private nature of the former employer, but the social security system under which the pension is paid and the nature of the related contributions.
The case examined
The taxpayer, who is tax resident in the People’s Republic of China, receives a pension paid by INPS, accrued exclusively through employment with private-sector employers. [1]
Having never worked for a public administration or performed public functions, the taxpayer considered Article 18, paragraph 1, of the Italy-China Convention to be applicable, under which pensions paid in respect of a past employment are, as a general rule, taxable exclusively in the beneficiary’s State of residence. On this approach, the pension should therefore have been taxed exclusively in China. [1] [2]
A new Italy-China Convention from 2026
The clarification is particularly significant because it comes in the first year of application of the new Convention for the avoidance of double taxation between Italy and China, signed on 23 March 2019 and ratified by Italy with Law No. 182/2024.
The Agreement entered into force on 19 February 2025 and, pursuant to Article 29, applies from 1 January 2026, replacing the previous 1986 Convention from that date. [2] [3]
The new Convention updates the rules applicable to the international mobility of individuals in several respects. Among the most noteworthy changes: [2] [3] [4]
- for employment income, the 183-day threshold under Article 15 is assessed by reference to a twelve-month period beginning or ending in the relevant fiscal year, rather than, as under the previous Convention, in the single calendar year; a similar time criterion is provided by Article 14 for professional activities and self-employment; [2] [3]
- again under Article 15, a specific rule is introduced for severance pay (TFR) and other similar lump-sum payments, giving exclusive taxing rights to the State from which such sums are paid, where they accrued during the period in which the beneficiary carried out work activity there; [2] [3]
- as regards pensions, the new Article 18 introduces a specific rule for benefits paid under a public social security system, which was absent from the previous Convention. [2] [3]
The main changes introduced by the new Agreement are also set out in the Report accompanying the bill ratifying the Italy-China Convention. [4]
This last change is precisely the one that matters in the case analysed by the Agency. The previous Convention provided that pensions relating to a past employment were taxed in the beneficiary’s State of residence. The new Article 18 retains this general rule in paragraph 1, but introduces in paragraph 2 an exception for pensions and other similar payments made under a public social security system, which are taxable exclusively in the State to which that system belongs. [2]
For a pension attributable to the Italian public social security system, therefore, taxing rights remain with Italy even when the pensioner is tax resident in China. [1]
The rules on pensions arising from services rendered to the State or other public bodies, governed by Article 19 of the Convention, remain separate. [2]
A pension from private-sector work can also fall within the public social security system
The Convention does not expressly define what is meant by “public social security system”. [1] [2]
The Agency therefore refers to the parliamentary materials on the ratification of the new Agreement, according to which this includes pensions paid under social security legislation in return for contributions that are compulsory by law, as well as benefits guaranteed by the State to pursue general solidarity objectives, such as disability pensions.
Reference is also made to Circular No. 41/E of 21 July 2003, according to which benefits paid in return for compulsory contributions relating to a past employment fall within the scope of social security, while those linked to voluntary contributions are excluded. [1] [5]
It follows that having worked exclusively for private-sector employers does not preclude the pension from falling within the public social security system. For the purposes of applying the Convention, what matters is the nature of the social security system under which the benefit is paid and the compulsory nature of the contributions from which it derives.
The clarification of the Italian Revenue Agency
In the case examined, the INPS pension accrued through work performed exclusively in the private sector, but is paid under the Italian public social security system in return for compulsory contributions.
The Agency therefore considers Article 18, paragraph 2, of the new Convention to be applicable, with the consequence of exclusive taxation in Italy. [1] [2]
A principle that should not be generalised to all foreign pensions
The conclusion of Reply No. 179/2026 relates specifically to the Convention between Italy and China and cannot automatically be extended to pensioners who are tax resident in other States.
The double taxation conventions entered into by Italy may in fact provide different criteria for the taxation of pensions and, in particular, of those attributable to social security or social insurance systems.
For pensioners resident abroad it is therefore necessary to verify, case by case, the nature of the pension benefit and the provisions of the applicable Convention.
Legal references and institutional sources
[1] Italian Revenue Agency – Reply No. 179 of 1 October 2026
[3] Law No. 376 of 31 October 1989 – Normattiva
[4] Report accompanying the bill ratifying the Italy-China Convention
[5] Italian Revenue Agency – Circular No. 41/E of 21 July 2003