Italy Tax Agency Clarifies Surtax Applicability on Public Pensions for Nonresidents Under DTA With Luxembourg

The Italian Revenue Agency May 25 issued Letter No. 106/2026, clarifying the treatment of regional and municipal surtaxes on individual income tax (IRPEF) under the 1981 DTA with Luxembourg, for a nonresident receiving an Italian public pension. The taxpayer, a resident of Luxembourg, received a pension from Italy’s National Social Security Institute (INPS) for prior employment in Italy, which was subject to IRPEF in Italy. The taxpayer requested clarification on whether regional and municipal surtaxes also applied to the pension income. The Tax Agency clarified that: 1) the surtaxes are calculated on the same taxable base as IRPEF and apply ...