ROME — Alberto, a former employee of the Italian Armed Forces, has lived for years in Hammamet, Tunisia, where his pension is taxed at just 20% of the gross amount, at a rate of 5%. The mild climate, low cost of living, and welcoming population have kept him away from Italy. But he has a partner in Rome and all his loved ones on the other side of the Mediterranean.

“I would be ready to return,” he tells us, “perhaps to a seaside village, to devote myself to fishing and sailing.” What’s missing, he adds, is a concrete tax incentive.

A measure under discussion in the Senate could do just that. Senator Domenico Matera of the Brothers of Italy party proposes a 4% flat tax for 15 years for Italian citizens residing outside the EU for at least five years who decide to move to a municipality classified as an SNAI internal area with a maximum of 3,000 inhabitants. The rate would apply to all income, including INPS pensions and any foreign income.

INPS, which in 2023 paid out over 310,000 pensions abroad for a total of €1.6 billion, expressed a favorable opinion, emphasizing that the scheme would not entail additional costs for the state.

Something already exists for foreigners

Since 2019, foreign pensioners earning income from abroad have been eligible for a 7% flat tax for 10 years by moving to municipalities in central and southern Italy with a population of up to 30,000. Applicants must not have been resident in Italy in the previous five years. The scheme does not apply to INPS pensions.

Towards a vote

The committee hearings concluded in early 2026, with amendments submitted by March. A vote could take place before the summer recess. If approved, the law would offer one of the most competitive pension tax regimes in Europe for those who choose small towns.

Over 5,500 Italian villages are at risk of disappearing entirely, according to data from the National Association of Italian Municipalities. For Alberto, and many like him, a seaside village could be calling again.