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The Italian pensioner residing in Bulgaria does not have to pay taxes on the pension in Italy
With the recent judgment of May 28, 2024 (r.g. no. 820/2023), the Labor Section of the Court of Pistoia upheld the appeal filed on behalf of my client regarding a matter of particular interest, relating to the taxation, also in Italy, of private pensions paid by INPS to Italian citizens fiscally resident in Bulgaria.
As is known, with message no. 1270 of April 3, 2023, INPS provided the “new criteria for exemption from the Italian tax regime applicable to pensioners residing in Bulgaria and communicates that the indications provided by message no. 612 of February 18, 2020, on the Italy-Bulgaria Convention against double taxation, should be considered superseded.”
In essence, according to INPS’s interpretation, the Italian citizen fiscally resident in Bulgaria can have their pension untaxed in Italy only if they first acquire Bulgarian citizenship.
The Court of Pistoia, with the well-founded judgment rendered as a result of the appeal filed by the undersigned, took the opposite view.
First of all, the Court correctly recognized, in the matter of interest, the ordinary jurisdiction, that is, of the Ordinary Court and not the Tax Justice Court, because the “relationship brought before the court ... is the relationship that binds not the taxing authority and the taxpayer, but rather the relationship that binds the withholding agent (in this case, INPS) and the person subject to withholding”.
Furthermore, the Court, in fundamentally excluding the existence of a necessary joinder with the Revenue Agency, fully recognized the passive standing of INPS.
On the merits of the case, the Judge correctly noted that “... it must be considered ... that the meaning to be attributed to the expression ‘Bulgarian nationality’ in Article 1, para. 2, letter b) of the Convention in question is that of residence, and not of citizenship. In fact, if the connecting criteria referred to in letter a), concerning subjection to Italian tax, are to be understood according to the technical meaning attributed to them by Italian law, it cannot be considered that the connecting criteria relating to taxation in Bulgaria are defined according to parameters and technical meaning specific to Italian law”.
Lastly, it is worth mentioning that the Court of Pistoia also upheld the further defense raised by the undersigned, relating to the illegitimacy of the pension recalculation order by INPS, not only in the absence of a prerequisite order from the competent Revenue Agency but, above all, on the basis of a mere request for clarification, moreover submitted by a taxpayer entirely unrelated to the case at hand: “Well, if this is the case, and taking into account the legal reservation that Article 23 of the Constitution contemplates in tax matters, the INPS order for the recalculation of the pension by virtue of the revocation of the favorable provisions on untaxation adopted in this case is unlawful, especially in the absence of a tax debt assessment act issued by the taxing authority”.
Judgment. Pistoia Court Labor Section r.g. n. 820-2023.pdf