Italy Tax Agency Clarifies Tax Treatment of Pension Fund Increase Payments

The Italian Revenue Agency Sept. 16 issued Letter No. 245/2025, clarifying the tax treatment of pension fund increase payments. The taxpayer, a pension fund for a banking group’s staff, offered its pensioners who had ceased service by Dec. 31, 2006, the option of capitalizing their pensions in progress into a lump-sum in compliance with Legislative Decree No. 252/2005, which entered into force Jan. 1, 2007. After a capital surplus, the taxpayer approved an increase it would pay in 2025 to the pensioners who were receiving a pension, or who had capitalized their annuity. Upon review, the Tax Agency clarified that: ...