AOW and pension in Italy: everything to the state of residence — and the 7% regime
The tax treaty of 1990 assigns AOW and private pension exclusively to Italy — the Netherlands must exempt them in full, without thresholds. And whoever moves to a southern Italian municipality of up to 30,000 inhabitants can opt for ten tax years of 7% on all their foreign income: the year of the move and the nine years after it. Only the government pension stays Dutch.
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If you live in Italy, your AOW, your occupational pension and your annuity are taxed only in Italy. A government pension, such as ABP, stays Dutch, unless you also become an Italian citizen.
Three things to know up front:
- For pensioners Italy is fiscally the friendliest country of all the classic destinations. That is not because of a loophole, but because of a treaty from 1990 that has never been renegotiated.
- The Netherlands withholds nothing more on them once you have applied for and received the exemption from wage tax from the Belastingdienst.
- Whoever moves with a foreign pension to a smaller municipality in southern Italy can opt on top of that for a flat tax on all their foreign income.
The treaty: the state of residence wins, across the board
Most newer Dutch treaties keep a finger on your pension: a source-state levy (tax in the country the pension comes from), a threshold amount, a 20% ceiling. The treaty with Italy has none of that. Your private occupational pension is under article 18 "taxable only" in your state of residence, Italy.
The treaty has no separate article for social security or annuities. That is why your AOW (the Dutch state pension) and annuity fall under the residual article (article 22), the article for income that falls under no other article. That too points exclusively to Italy: a different route, the same outcome.
In practice that means: apply to the Belastingdienst for an exemption from wage-tax withholding for your pension fund and the SVB. After that nothing more is withheld in the Netherlands.
The one exception is the government pension (ABP from government employment). That stays Dutch, unless you become an Italian citizen as well as a resident.
And this regime is staying. Italy is not on the Dutch negotiation agendas; that has been checked up to and including the letter to Parliament of April 2026.
| Income or scheme | What applies |
|---|---|
| occupational pension | Italy only (article 18) |
| AOW and annuity | Italy only (article 22) |
| government pension | the Netherlands, unless you are also an Italian citizen (article 19) |
| let house in the Netherlands | the Netherlands (article 6) |
| dividend from the Netherlands | the Netherlands withholds at most 15% (article 10) |
| interest from the Netherlands | the Netherlands withholds at most 10% (article 11) |
| 7% regime | municipalities up to 30,000 inhabitants in eight southern regions, ten tax years: the year of your move and the nine years after it |
| CAK country-of-residence factor 2026 | 0.4641 |
Assets that stay behind in the Netherlands
For whoever keeps a house, shares or savings, three rules from the same treaty apply:
- A let house in the Netherlands remains fully taxed in the Netherlands. Income from immovable property belongs to the country where it is located (article 6).
- On dividend from a Dutch company the Netherlands as source state may withhold a limited amount: 15% for an individual. The lower rates of 10 and 5% in article 10 apply only to companies holding at least 10 or more than 50 percent of the votes.
- On interest the source state may keep at most 10% (article 11).
Whoever opts for the 7% regime below therefore reckons with two layers: what the Netherlands holds on to as source state, and the 7% that Italy charges on the foreign income.
The 7% regime: ten years of flat tax in the South
On top of that, Italy itself has an invitation ready. It applies to whoever has a pension from a foreign provider and moves their tax residence to a municipality with at most 30,000 inhabitants in Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise or Puglia. Municipalities in Lazio, Marche and Umbria that were hit by the 2016 earthquakes also count, with the same limit. That limit was widened from 20,000 in April 2026; many sites still miss that. Whoever meets these conditions can opt for a flat tax of 7% on all their foreign income. Not only the pension: Dutch savings, investments and rental income fall under it too.
You choose the option in your first Italian tax return. According to the Agenzia delle Entrate, the Italian tax authority, the option applies for ten tax years: the year of your move and the nine years after it. For the population figure the number from Istat, the Italian statistics office, of 1 January of the year before the first option year counts. That figure keeps applying as long as you do not move to another municipality.
The treaty lets Italy tax exclusively and sets no subject-to-tax requirement: the requirement that the income is actually taxed in the country of residence. That is why the combination with a Dutch pension works. Do have precisely this interplay confirmed by a tax adviser for your situation; that one conversation pays for itself twice over here.
The healthcare side: a country-of-residence factor of less than half
As a pensioner your healthcare runs via the CAK. You apply for the S1 form and hand it in at the ASL of your place of residence, the local Italian health service. Then you are fully registered in the Italian system, at the expense of the Netherlands.
The contribution that stands against it is multiplied by the country-of-residence factor. That factor says how expensive healthcare in your country of residence is compared with the Netherlands. For Italy in 2026 it stands at 0.4641, the three-year average of 0.4541, 0.4811 and 0.4572. So you pay less than half of what the contribution would be without that factor.
Two dates to know:
- Whoever wants to leave on early retirement must, as expected, be registered with the CAK before 1 November 2026. After that only AOW, Anw, WAO, WIA and Wajong still give access. The CAK itself still calls the date an expectation.
- The protective assessment on your pension accrual (an assessment the Belastingdienst imposes on emigration but does not collect straight away) is a paper matter within the EU: automatic deferral, and after ten years remission on request, as long as you do not surrender it.
In Vertrekklaar this is phase 2 of 5 of the journey: the same steps, but for your situation — in your order, tickable, and with the deadlines watched. See the whole journey to Italy.
What this means for your numbers →
What this rests on
The facts in this article come from these official pages. Rules change. When in doubt, go by the source, not this article.
- Tax treaty Netherlands–Italy 1990 (Trb. 1990, 86) — articles 6, 10, 11, 18, 19 and 22 — wetten.overheid.nl
- Agenzia delle Entrate — the 7% regime for foreign pensioners — agenziaentrate.gov.it
- Letter to Parliament on tax-treaty negotiations 2026 — open.overheid.nl
- CAK — moving abroad with a Dutch pension — hetcak.nl
- Staatscourant 2025, 38064 — the country-of-residence factors for 2026 — zoek.officielebekendmakingen.nl
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