Italy’s Revenue Agency (Agenzia delle Entrate) clarified that a public pension paid to a citizen with dual Italian and Lebanese nationality who is a tax resident in Lebanon must be taxed exclusively in Italy.
The interpretation is set out in response to tax inquiry No. 202, dated November 5, 2026, and is based on the double taxation treaty signed by the two countries.
According to the tax authority, the beneficiary’s Italian citizenship prevents the application of the exception provided for in the treaty, which would allow exclusive taxation in the country of residence.
Retiree wanted to pay tax only abroad
The case involves a former employee of an Italian ministry who worked for approximately 35 years in public administration.
Since September 1, 2026, he has received a public pension paid by the National Social Security Institute (INPS), linked to the former INPDAP system.
The retiree said he lives in Lebanon, is registered with the Registry of Italians Residing Abroad (AIRE), and holds citizenship in both countries.
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Facing questions about taxation of the benefit, he consulted the Revenue Agency to find out whether he could pay tax exclusively in Lebanon.
His argument was that Lebanese citizenship, combined with tax residency in that country, would be sufficient to exclude Italian taxation.
The tax administration rejected that interpretation.
Why does dual citizenship prevent the exemption in Italy?
The response is based on Article 19, paragraph 2, of the tax treaty between Italy and Lebanon, signed on November 22, 2000, and ratified by Italy through Law No. 87 of June 3, 2011.
Under the treaty’s general rule, pensions paid by a state for services rendered to its public administration are taxed exclusively by the country responsible for the payment.
The treaty provides an exception for beneficiaries who reside in the other state and hold its nationality, provided they do not also hold the nationality of the country paying the pension.
In the case examined, the beneficiary holds Lebanese citizenship but also retains Italian citizenship.
For this reason, the Revenue Agency concluded that the exception does not apply and that Italy retains the exclusive right to tax the public pension.
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Rule does not automatically apply to all retirees
The clarification does not mean that all citizens with dual nationality who receive an Italian pension must pay tax exclusively in Italy.
Taxation depends on the nature of the benefit, the country of tax residence, and the provisions of the applicable international treaty.
Pensions from private-sector work, for example, may be subject to different rules from those established for benefits related to public service.
The Revenue Agency also stressed that its interpretation takes into account the information provided by the taxpayer, especially tax residency in Lebanon and the public origin of the pension. These circumstances were not verified during the review of the inquiry.
Response No. 202/2026 is an administrative clarification on the application of tax legislation. It is not a court decision or a general change in the rules on pensions paid to Italians residing abroad.
For Italian Brazilians, tax treatment must be examined in light of the treaty between Brazil and Italy, which has its own provisions.
