One thousand Italian pensioners I resident Bulgaria Experiencing a nightmare:Revenue Agency Requested them payment Of Back taxes Since 2016, also applying. Restrictions of the case. It all comes from a change in interpretation Tax treaty A bilateral agreement between Italy and Bulgaria was signed in 1988.
Until recently, Italian pensioners living in Bulgaria were able to benefit from one. Tax Exemption which proved that checks should not be taxed for tax residents in Bulgaria. Many have chosen to migrate this way, attracted by the tax advantage and the lower cost of living compared to Italy.
The interpretation of INPS varies.
But now it seems the dream is over: everything has changed. June 2023whenInps changed the interpretation of the convention. According to the new course, the Italian pension must be in place. Taxed Based on Italian citizenshipand the tax is no longer based on residence.
This caused a ripple. Adjustment From the Revenue Agency, which applied the sanctions, requesting payment of back taxes for the last 7 years.
Financial difficulties for pensioners
The economic consequences for pensioners have been dire: many have seen their allowances cut drastically, in some cases by 50 or 70%, while others have their pensions stopped altogether to pay tax debts. is This situation has left many with insufficient resources to cover basic expenses such as rent, bills and medical care. In some cases we are talking about loans of around 25,000 euros.
lawyer Margarita CosaThe representative of the Association of Italian Pensioners in Bulgaria claims that the restrictions and adjustments applied are “disproportionate” and have put pensioners in serious financial difficulties. The same association sent a letter to the Deputy Minister of Economy, Maurizio Leo, to raise the issue, but so far there has been no decisive intervention by the Italian authorities.
Conflict between Italy and Bulgaria
Complicating the issue is the differences between the two states. Bulgaria has asked Italy to review the new interpretation of the tax treaty, which has identified the risk of breaches of European law. However, the Italian government refused, arguing that the collection of back taxes is a consequence of the principle of fiscal equality: Italian citizens – it is argued – are exempt from their country’s tax obligations regardless of residence abroad. Should be respected. On the other hand, the Bulgarian government continues to consider tax-exempting Italian pensions on its territory, creating an additional level of uncertainty for pensioners.
Reactions and results
After the change in INPS interpretation that led to a flurry of adjustments, some pensioners decided to resort to justice, in some cases First example sentences However, litigation often proves to be lengthy and expensive. Others have chosen to move to countries with more favorable tax regimes, while some have returned to Italy.
“And as if that was not enough, and what is even more serious, the Revenue Agency has now decided to amend the assessment notices for 7 years of arrears, even imposing a penalty, 120% penalty For a simple mistake by a pensioner Reliable of the Italian Public Administration”, reached by lawyer Margherita Cossa TGcom24.
