7% Flat Tax · Qualifying Comuni
Find Italian municipalities of 30,000 residents or fewer in Sicily, Sardinia, Calabria, Campania, Basilicata, Molise, Puglia, and Abruzzo that qualify for the 7% flat tax regime — a single 7% rate on all foreign-source income (pensions, dividends, capital gains, rental income) for up to ten years. Click any pin below to see the comune, its population, and region. JSBC files the election, residency paperwork, and ongoing Italian tax returns for clients relocating under the regime.
Who qualifies, which comuni are eligible, and how long the 7% rate lasts ↓
Italy's 7% Flat Tax, Answered
You qualify for Italy's 7% flat tax regime if you receive a pension paid from outside Italy, you were not an Italian tax resident for the five tax years before you move, and you take up residence in an eligible southern comune. The foreign pension is the entry ticket: without pension income from a foreign source there is no election to make, whatever else you earn. U.S. Social Security, a 401(k) or IRA drawdown, and a private or public U.S. pension can all serve as that qualifying income, though how each one is treated under the U.S.–Italy treaty differs and is worth confirming before you move.
Eligible comuni are municipalities of 30,000 residents or fewer in one of eight southern regions: Sicily, Sardinia, Calabria, Campania, Basilicata, Molise, Puglia, and Abruzzo. The limit was 20,000 until 7 April 2026, when it was raised to 30,000. Separately, comuni affected by the 2009 and 2016 earthquakes can qualify under their own rules. The map on this page is filtered to the current 30,000 threshold, so every pin you see meets the population test as the law stands today.
No, and this is the live uncertainty in the regime. Italy raised the limit to 30,000 on 7 April 2026, but the rewritten income tax code that takes over on 1 January 2027 appears to carry the retirement tax forward with the old 20,000 figure. Read literally, the wider limit would lapse. The change is widely read as a drafting accident rather than a deliberate reversal, and there are solid arguments that the original rule should win, but nothing is settled. If you are looking at a town of 20,001 to 30,000 residents, your position depends on when you become an Italian tax resident — we set out the four situations in our analysis of the 2027 town-limit problem.
The 7% election covers the year you move plus the following nine, so ten tax years in total. It runs from the year you first become an Italian tax resident, not from the date you arrive or buy a house. Because Italian tax residency requires being in Italy for the greater part of the year, arriving in September means you are not resident until the following year, and the ten-year clock starts then.
The 7% rate applies to foreign-source income of every category, not only the pension that qualified you. Foreign dividends, interest, capital gains, rental income from property outside Italy, and the pension itself are all taxed at the single 7% rate. Italian-source income is excluded and is taxed under ordinary Italian rules. You can also elect to leave particular countries out of the regime and have income from those countries taxed normally, which can be worth doing where a foreign tax credit would otherwise be lost.
You make the election in your Italian tax return for the first year you are resident, and no advance ruling from the Italian tax authorities is required. That is a meaningful difference from the separate flat-tax regime for high-net-worth new residents under article 24-bis, which does commonly go through a ruling. In practice the work is establishing residency correctly, registering with the comune, choosing the filing position, and coordinating the Italian return with the U.S. return you still have to file as an American.
Yes. U.S. citizens and green card holders file a U.S. return on worldwide income regardless of where they live, so electing the 7% regime in Italy does not end your U.S. filing obligation. FBAR and FATCA reporting continue to apply on the same thresholds. The planning question is how the Italian 7% interacts with the U.S. return through the treaty and the foreign tax credit, because a 7% Italian rate generates far less credit than ordinary Italian rates would, and that can leave more U.S. tax payable than people expect.
Who qualifies for Italy's 7% flat tax?
You qualify for Italy's 7% flat tax regime if you receive a pension paid from outside Italy, you were not an Italian tax resident for the five tax years before you move, and you take up residence in an eligible southern comune. The foreign pension is the entry ticket: without pension income from a foreign source there is no election to make, whatever else you earn. U.S. Social Security, a 401(k) or IRA drawdown, and a private or public U.S. pension can all serve as that qualifying income, though how each one is treated under the U.S.–Italy treaty differs and is worth confirming before you move.
Which Italian comuni are eligible for the 7% flat tax?
Eligible comuni are municipalities of 30,000 residents or fewer in one of eight southern regions: Sicily, Sardinia, Calabria, Campania, Basilicata, Molise, Puglia, and Abruzzo. The limit was 20,000 until 7 April 2026, when it was raised to 30,000. Separately, comuni affected by the 2009 and 2016 earthquakes can qualify under their own rules. The map on this page is filtered to the current 30,000 threshold, so every pin you see meets the population test as the law stands today.
Is the 30,000-resident limit for Italy's 7% tax permanent?
No, and this is the live uncertainty in the regime. Italy raised the limit to 30,000 on 7 April 2026, but the rewritten income tax code that takes over on 1 January 2027 appears to carry the retirement tax forward with the old 20,000 figure. Read literally, the wider limit would lapse. The change is widely read as a drafting accident rather than a deliberate reversal, and there are solid arguments that the original rule should win, but nothing is settled. If you are looking at a town of 20,001 to 30,000 residents, your position depends on when you become an Italian tax resident.
How long does Italy's 7% flat tax last?
The 7% election covers the year you move plus the following nine, so ten tax years in total. It runs from the year you first become an Italian tax resident, not from the date you arrive or buy a house. Because Italian tax residency requires being in Italy for the greater part of the year, arriving in September means you are not resident until the following year, and the ten-year clock starts then.
What income does Italy's 7% flat tax cover?
The 7% rate applies to foreign-source income of every category, not only the pension that qualified you. Foreign dividends, interest, capital gains, rental income from property outside Italy, and the pension itself are all taxed at the single 7% rate. Italian-source income is excluded and is taxed under ordinary Italian rules. You can also elect to leave particular countries out of the regime and have income from those countries taxed normally, which can be worth doing where a foreign tax credit would otherwise be lost.
How do you elect Italy's 7% flat tax regime?
You make the election in your Italian tax return for the first year you are resident, and no advance ruling from the Italian tax authorities is required. That is a meaningful difference from the separate flat-tax regime for high-net-worth new residents under article 24-bis, which does commonly go through a ruling. In practice the work is establishing residency correctly, registering with the comune, choosing the filing position, and coordinating the Italian return with the U.S. return you still have to file as an American.
Do Americans still file U.S. taxes under Italy's 7% regime?
Yes. U.S. citizens and green card holders file a U.S. return on worldwide income regardless of where they live, so electing the 7% regime in Italy does not end your U.S. filing obligation. FBAR and FATCA reporting continue to apply on the same thresholds. The planning question is how the Italian 7% interacts with the U.S. return through the treaty and the foreign tax credit, because a 7% Italian rate generates far less credit than ordinary Italian rates would, and that can leave more U.S. tax payable than people expect.
Picked a comune and want to know whether the election actually works for your income mix — and what it does to your U.S. return?
Book a Free ConsultationGeneral information on Italy's article 24-ter regime for foreign pensioners, current as of August 2026. It is not tax advice for your situation, and the 2027 town-limit question above is unresolved. JSBC is a U.S.–Italy cross-border tax firm with offices in Chicago and Sicily.
Not sure where you stand with U.S.–Italy taxes? Book a free consultation — no commitment, no surprises.
Book a Free ConsultationReport an error in the data, a bug on the page, or suggest a feature for the 7% tax map. Goes straight to Paul.