How 7 Income Streams Are Taxed In Italy (2024)

Learn how 7 income streams are taxed when you move to Italy.

I share one idea that could save you $48,906 in taxes if done correctly.

Links mentioned in the video:

[shant]

Love the videos. These are my Sunday Morning Cartoons. 🙂

[KWCoaching]

Great info, thank you! Do you know if Italy will tax VA/government disability payments? I’ve been looking for that info and haven’t found it anywhere, yet.

[mvp]

OK, Tommy, here is a question I have had regarding Roth withdrawals while living in Italy and cannot seem to get a satisfactory answer.

Say you have a regular IRA, and Roth IRA, and a regular "passbook" savings account each with $100K; all US accounts. Obviously, if you withdraw money from the regular IRA, it is taxed in Italy as ordinary income under the progressive tax regime. If you withdraw from your regular savings account, it is not. (Well, except for the Italian overseas asset tax, which you should also cover.) If you withdraw from the Roth, how do the Italian taxing authorities know to tax the Roth when it is a financial construct that they don't even recognize? How would they know it is not just a regular savings account withdrawal, which is untaxed (save for interest, of course). Thanks for your channel and info.

[tashiaderrer]

Hi Tommy, thank you for sharingvthis information. Is it the same rules for the Canadians and government pensions from Canada?

[AlessioBasta]

This is really a great video! Thanks for the clarity! I started recently building my pension in USA (maximising 401k) but the base case for my wife and me will be to move back to Italy for retirement. Do you suggest contributing to Roth or traditional 401k? Thanks!

[TheMousPotato]

Something that might help if you want to retire in Italy/France from a country like US/Canada for example is that many people have citizenship in an EU country without realizing it.
In my case my father was born and raised in Ireland so that granted me citizenship by descent. A few years ago I went through the process of claiming citizenship for the Republic of Ireland. Since I was already considered a citizen it was a simple process of getting a passport completely online from Canada. It took some paperwork and about 13 weeks total.
I don’t know how much it helps exactly as I’m just beginning the process of exploring retirement in a EU country but I’m guessing being an EU citizen gives certain benefits when moving to another EU country like Italy or France.
Explore your roots 🤷🏼‍♂️

[educagnin]

Hello … many thanks for your work disseminating this information… Regarding retired firefighters could you please clarify if I could live in Italy more than 6 months and still be tax exempt?

[carlrossi]

Very informative. I have one request, and that is to make a similar video on income streams for France. Also, as I am a dual citizen already of Italy (EU) and a state pensioner in CA/USA, do I pay taxes in both countries on pension income? Thank you.

[ninobk]

you have the best content. Always concise, no bells and whistles. Straight to the point. Not sure why you don't have more followers. Your information is always on point and I appreciate your videos. Always informative. 

In Italy, I would only move to areas that are part of the 7% flat tax. I prefer to keep as much money as possible.
I have a question since I have a Roth IRA:
So in essence since this is a post tax product in the USA, then paying the 26% or 7% is basically getting double taxed since we already paid taxes on that money. Is this something that can then be deducted from the US taxes?

Is rental income taxed the same?


I am trying to determine which country (France or Italy. I like them both the same although I speak a lot more Italian) is more advantageous for someone with rental income back in the USA, IRA and Roth IRA. I also dabble in trading. I am not a day trader but I do trade.  
I am 51 so I won't be withdrawing from my retirement accounts for another 10 years.

[JamesClassV]

Excellent! This is the ONE VIDEO on YouTube that answered all my Italian tax questions. I'm moving to a 7% flat tax zone and it's helpful to learn all of these tips. The "NO ROTH CONVERSIONS" recommendation makes sense. However, since I'm taking advantage of the 7% flat tax, can I convert on year 1 and 2 and allow for growth then harvest everything before year 10 (the year the 7% flat tax expires)?

[VictorLaMura-mnfe]

Hi Tommy what income limits if any are the 7% flat tax qualified for ?

[iseolake]

Nice summary. Just would like to clarify Italian tax treatment of gains that stay within a normal IRA. So I have stock in my IRA, which I will need to sell to get cash for withdrawal. I also earn interest and dividends in the IRA. Several sources I checked say that I only pay tax on the withdrawal. Not on gains in the IRA. Other accountants I checked said that Italy will tax the gains on my IRA. And I heard experts on a video say that some accountants say yes, others no on this point. If the gains in the IRA are taxed by Italy, would they then also tax the withdrawals? Seems to me that they shouldn't do both, but logic doesn't always apply when it comes to navigating multiple jurisdictions and treaties.

[awest]

Are you sure Roth withdrawals are taxed. Under the US dual tax treaty they specifically mention that they are not taxed by the in the country of residence.

[saintpreferred]

If you have Federal Tax free income from, say, investments in your brokerage accounts, and lets say you live in a tax free US state (NV, TN, that income is not taxed in the USA. All of that income will be taxed in Italy. You'll get a credit on that tax on your US return, but that could result in a tax-credit carryforward....you still have to pay it out to the Italian government on time.

[whitemiata]

I haven't finished watching the video yet but there's a troubling bit in the Capital Gains section that could prove disastrous for many of your viewers. The whole thing about you can pull 94, 050 and pay no tax is NOT true for anyone who has an income... ANY INCOME. Meaning that those numbers are reduced by your income. A Police officer or Firefighter who might have a pension (I'm assuming that's what your surprise thing is at the end... local government and U.S. government pensions not taxed in italy EVER if you don't get citizenship) and is getting say 75, 000 a year from that... would only be able to pull out 94050-75000 or around 19K tax free.

I think that's something very important to point out.