# Retirement



## acunamatata

Hi All, Anyone knows how the social security payment is taxed Italy? Also is it quite easy to have it sent to an Italian bank account? I have read as well as consulted with a couple of Italian CPAs as well as local ones but was given different info. 
It's always good to hear from someone that is actually doing it. 

Grazie mille!


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## PauloPievese

*Good Luck!*

I did some research on this a while ago, summarized here:
https://www.expatforum.com/expats/i...425482-italian-income-taxes-u-s-retirees.html

:flypig:


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## dave2020

Hi. According to the tax treaty, all income, except for U.S. govt. or State govt. worker pensions, is taxable by Italy if you are a resident. This includes Social Security income as well as retirement account income. Additionally, there is a wealth tax of 0.2% on any financial assets you maintain in a bank outside of Italy, with the exception of a checking account for which you pay a fixed fee. There are Americans living in Italy who pay Italian tax on their Social Security, and there are some who don't. It really depends on which accountant(commercialista in Italian) that you talk to. That's how Italy works, i.e. things are not at all consistent and can be confusing even for Italians.


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## Bevdeforges

On the US side of things, an Italian citizen resident in Italy is exempt from US income tax on their Social Security benefits. What that means for a non-Italian citizen drawing US SS benefits in Italy, I'm not sure - but see IRS Pub 915 for details.


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## NickZ

https://it.usembassy.gov/u-s-citizen-services/irs/

I don't know why people find it hard to understand. That's the US government view point on both sides of the issue. Scroll down to the chart.


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## noob_for_life

*There is a deal*

I believe that, in order to promote growth in southern towns, the Italians have a tax deal for retirees. Under its terms, of the income and wealth taxes, for six years you pay only the 7% health care tax on income. In addition, according to an American friend of mine in Venice, the first $100,000 of US based income is deductible on US taxes.

If I have all that right, this can be very attractive for that time. Here is one posting about it. Looking for others, I think they may have adjusted the time limit from six to nine years.

Unfortunately, I am too new to the forum to include links in this post. But, if you search for "italian taxes for foreign retirees" you'll find a bunch of pages discussing it.


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## NickZ

https://www.repubblica.it/economia/diritti-e-consumi/fisco/2019/06/09/news/pensionati_sud-228147479/

7% isn't the health charge that would be on top of that. You're limited to smaller towns. It's only for five years. It's also a flat tax so no deductions. Do your math carefully. 7% can actually end up higher for low income seniors.

Worse the Italian government has a nasty habit of changing the rules at a drop of the hat.


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## Anna_Magnani

Bevdeforges said:


> On the US side of things, an Italian citizen resident in Italy is exempt from US income tax on their Social Security benefits. What that means for a non-Italian citizen drawing US SS benefits in Italy, I'm not sure - but see IRS Pub 915 for details.


That would seem to fall under the general tax agreements between the US and Italy correct? You as a rule don't pay taxes on any income twice.


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## Anna_Magnani

dave2020 said:


> Hi. According to the tax treaty, all income, except for U.S. govt. or State govt. worker pensions, is taxable by Italy if you are a resident. This includes Social Security income as well as retirement account income. Additionally, there is a wealth tax of 0.2% on any financial assets you maintain in a bank outside of Italy, with the exception of a checking account for which you pay a fixed fee. There are Americans living in Italy who pay Italian tax on their Social Security, and there are some who don't. It really depends on which accountant(commercialista in Italian) that you talk to. That's how Italy works, i.e. things are not at all consistent and can be confusing even for Italians.


This doesn't concord with the link provided above by PaoloPievese. 

Also, I think we need to be clear about one's status: are you a resident and not an Italian citizen, or a resident Italian citizen? 
There's a reason why Sophia Loren was in jail in the 80s? and why she lives in Switzerland now .


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## PauloPievese

*Round and round she goes and where she stops nobody knows*



Anna_Magnani said:


> This doesn't concord with the link provided above by PaoloPievese.


Welcome to the USA/Italy tax discussion merry-to-round. 

:flypig:


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## Anna_Magnani

PauloPievese said:


> Welcome to the USA/Italy tax discussion merry-to-round.
> 
> :flypig:


I would've linked it but I don't have linking privs yet!


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## Bevdeforges

Anna_Magnani said:


> That would seem to fall under the general tax agreements between the US and Italy correct? You as a rule don't pay taxes on any income twice.


It's your second sentence that is the problem. The tax treaties are constructed so as to *avoid *double taxation - but the methods involved on either side are not perfect and it is possible that you will pay tax to both of your "tax residence" countries on the same income.


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## PauloPievese

*Paul Tosses a T**d into the Punchbowl*



noob_for_life said:


> 7% health care tax on income


Just to merge to conflicting trains of thought, Noob (no boob) mentions the 7% healthcare tax on income. *Presuming* that the info I got from an accountant specializing in expats and as confirmed by an Italian accountant (okay, I know they call them something else), that SSA and IRA income is *reported to* but *not taxed by* the Italian government how does this 7% thing work if indeed that is a real thing? 

Believe it or not, despite the opinions of deceased Italian movie stars, I want to pay my fair share; just don't know how to do it. (Presuming I get back in.)

:flypig:


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## NickZ

When the IRS (Or whatever the local body is) gives you guidance you aren't forced to follow it but if you don't you should be ready to explain yourself if/when you get audited.

The national health care system in Italy is run regionally. You would need to sign up with your local ASL office

Assistenza ai cittadini dei Paesi extra UE in Italia

http://www.salute.gov.it/imgs/C_17_pagineAree_1764_0_file.pdf



> Per iscriversi volontariamente al SSN occorre corrispondere un contributo annuale calcolato sul
> reddito complessivo conseguito nell’anno precedente (da intendersi come anno solare) in Italia o
> all’estero.
> Tale contributo si calcola applicando:
> • l’aliquota del 7,50% fino alla quota di reddito pari a € 20.658,28
> • l’aliquota del 4% sugli importi eccedenti a € 20.658,28 e fino al limite di €. 51.645,69
> In ogni caso l’importo non potrà essere inferiore a € 387,34


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