Commission given authority to determine application of new tax regulations for EU's social security system under new rules.
Italian Pensioners Seek Tax Benefits and Affordable Living in Mediterranean Destinations
Italian retirees are increasingly seeking tax advantages and a lower cost of living in various countries and regions. The top destinations over the past decade include Mediterranean countries like Spain's Balearic Islands and Greece, as well as some Latin American countries.
In the Balearic Islands, Mallorca, Menorca, Ibiza, and Formentera, Italian retirees are drawn by excellent healthcare, a large international community, and a high quality of life. Mallorca is particularly popular due to its comprehensive services and amenities, while Menorca offers a quieter lifestyle with good healthcare and lower living costs. Ibiza appeals to those seeking an active social environment, although it has higher prices. Formentera caters to ultra-wealthy retirees who value exclusivity.
Greece offers a flat 7% tax on all foreign income (including pensions) for 15 years, provided the person has not been a fiscal resident in the country in the last 5 years. To be eligible, one must have a modest pension income of €3,500 per month or a real estate investment of €250,000. Greece also provides affordable Mediterranean living and residency options, including a golden visa program.
Costa Rica is another popular destination for Italian retirees due to its tax benefits like territorial taxation (no tax on foreign income) and world-class, affordable healthcare. To qualify for residency, one must have a monthly pension income of $1,000.
Belize, an English-speaking country, offers zero tax on foreign income under its Qualified Retired Persons program. This makes it an attractive option for those seeking language convenience and tax advantages. To qualify, one must have a foreign income of $2,000 per month.
Nicaragua, with its very low-cost living and no foreign income tax, is another option, but it has concerns about political stability. To qualify for residency, one must have a monthly pension income of $1,000 and enjoy extensive import duty exemptions.
Among European options, Greece and Spain stand out for Italian retirees due to cultural proximity, climate, and favorable tax treaties. The Latin American options are attractive for their very low cost of living and tax exemptions but might present language and stability considerations.
In addition to these destinations, Tunisia and Romania have seen a marked prevalence of male pensioners among those moving there. In Tunisia, 80% of income is tax-free for retirees arriving from other countries, and the head of the family can enjoy an additional deduction. The maximum tax rate is 5%. In Romania, foreign pensions are taxed at 10%.
For those looking to establish tax residence in another country, it is necessary to sign a long-term rental contract, buy a house, open a bank account, and be registered with AIRE, the Registry of Italians Resident Abroad. Croatia has a deduction that reduces the taxable base by 50%, but above 60,000 euros, progressive taxation applies. Turkey taxes foreign pensions at 20%.
In 2023, Spain and Portugal were the preferred foreign countries for Italian pensioners, followed by Switzerland, France, and Germany. The migratory phenomenon involved mainly the large regions of the North and Centre, as well as Sicily, while the South and Islands showed a more contained participation.
It is important to note that the number of Italian pensioners leaving for foreign countries is on the rise again, with the propensity to flee abroad having grown exponentially over the years. The regions with the highest emigration rates in 2023 include Trentino-Alto Adige, Friuli-Venezia Giulia, and Valle d'Aosta.
References: [1] [Source 1] [2] [Source 2] [3] [Source 3] [4] [Source 4]
- Many Italian retirees are attracted to Mediterranean destinations for their favorable tax benefits, lower cost of living, and high quality of life.
- In the Balearic Islands, Mallorca, Menorca, Ibiza, and Formentera, Italian retirees find excellent healthcare, a large international community, and a variety of lifestyles.
- For some, Greece offers a flat 7% tax on foreign income, residency options, and affordable Mediterranean living.
- Costa Rica, with its territorial taxation and world-class, affordable healthcare, is another popular destination for Italian retirees.
- Belize's Qualified Retired Persons program, which offers zero tax on foreign income, attracts retirees seeking language convenience and tax advantages.
- Nicaragua, with its low cost of living and no foreign income tax, is another option, but concerns about political stability exist.
- Spain and Greece stand out as attractive European options due to cultural proximity and favorable tax treaties.
- Latin American options, such as Costa Rica, Belize, and Nicaragua, offer low costs of living and tax exemptions but might present language and stability considerations.
- Tunisia and Romania are other destinations that have seen an increase in Italian retirees, mainly due to their tax advantages.
- To establish tax residence in another country, it is necessary to sign a long-term rental contract, buy a house, open a bank account, and be registered with AIRE.
- In 2023, Spain and Portugal were the preferred foreign countries for Italian pensioners, followed by Switzerland, France, and Germany.
- The propensity for Italian pensioners to flee abroad has grown exponentially, with regions like Trentino-Alto Adige, Friuli-Venezia Giulia, and Valle d'Aosta showing the highest emigration rates.
- In addition to Mediterranean destinations, environmental-science enthusiasts may find interest in climate-change research in various regions.
- Pensioners interested in personal-finance, data-and-cloud-computing, technology, finance, and career-development might find opportunities in business centers worldwide.
