The Italian pensioners tax allowance, that isn't.

Recently I have been having discussions with people about the supposed tax free allowance of €7500 for pensioners resident in Italy.  The problem is that this is an allowance that is not an allowance.

In fact it is nothing of the sort.  It is actually a tax credit




For those people under the age of 75 it is a credit up to a maximum of €1725 on a maximum gross pension income of €7500.  However the credit diminishes proportionately, and in fact once you get to a gross income of over €55000 there is no credit at all.

So it is not the equivalent of the UK tax free personal allowance, but in fact a totally different mechanism.

There are slightly more generous rules for those over age 75.

I hope this clears up the point.

This advice has been provided by Judith at Studio del Gaizo Picchioni.  They provide an English speaking commercialista service for the International community in Italy.  You can contact Judith on jruddock@studiodelgaizopicchioni.it if you want more information.

Alternatively you can contact me on gareth.horsfall@spectrum-ifa.com or 3336492356, for more information