With the reply to ruling No. 616 published on 20 September 2021, the Italian Revenue Agency has provided clarification on which individuals can benefit from the substitute taxation scheme in the event they are holders of foreign pensions.
An individual who is resident abroad, who has not reached the retirement age and would like to join a supplementary pension scheme according to which he/she receives periodic payments from his/her pension account for 5 years and up to the attainment of 59,5 years, if this threshold is after the expiry of the five-year period, he/she can transfer the residence in one of the Southern regions of Italy and take advantage of the substitute tax of IRPEF of 7%, provided for by article 24-ter of the TUIR.
It should be recalled that Article 24 of TUIR provides for a 7% substitute tax scheme on foreign income of individuals who are holders of foreign pension income referred to in Article 49, paragraph 2, lett a) who transfer their tax residence to the Southern regions of Italy.
The Italian Revenue Agency also clarifies that supplementary pension benefits provided by a foreign professional pension fund or provided through a foreign insurance company and paid in the form of capital or annuity are attributable, on an ordinary basis, to the income referred to in Article 49, paragraph 2 letter a) of the TUIR, because the same benefits are not subject to the Italian supplementary pension law referred to in Legislative Decree 252/2005, whose benefits are attributable to the employment income scheme.
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