How much your net pension grows in Albania

In short

There is no single percentage, the same for everyone, for how much the net pension "grows" by moving to Albania. The real gain depends on two things: how much income tax you stop paying in Italy, which changes with the size of the pension, and how much Albania charges, which has to be checked.

There is, however, a rule that helps frame it: the advantage matters most for medium-to-high private pensions. For more modest pensions it is smaller, because in Italy they already pay little tax. Here is why.

It only applies to private pensions

The starting point is always the same: the tax advantage concerns private pensions, those from former employment such as the typical INPS pension, which under the Italy-Albania convention are taxable only in the country of residence. Public pensions (ex-INPDAP, state, military) stay taxed in Italy. If you have not yet worked out which category you fall into, start from the guide on pension taxation: without that first step, any calculation is pointless.

How income tax works in Italy

In Italy the pension is taxed with IRPEF, which is progressive. Since 2025 there are three rates: 23% on income up to 28,000 euro, 35% on the part between 28,000 and 50,000 euro, 43% on the part above 50,000 euro.

Pensioners also have an exemption threshold and deductions, so lower pensions pay little or no income tax. This explains the asymmetry: someone on a modest pension already pays little in Italy, so has little to "recover"; someone with a higher pension pays rates of 35% or 43% on the excess, and there the margin becomes significant.

An example, just to grasp the order of magnitude

Take, purely as an illustration, a private pension whose top portion falls into the 35% band. On that slice, today, you pay exactly 35% in tax in Italy. If that same pension becomes taxable only in Albania, that share of Italian income tax is no longer paid.

This is the "gain" people talk about in the forums. But it is half the sum, and it must be said honestly: how much actually stays in your pocket also depends on what Albania applies.

The other half of the sum: Albania

Albania taxes its residents on income wherever it is produced. How much is actually applied to a foreign private pension is the figure to check, for the current year and for your situation: it is not prudent to take it for granted, nor to start from the idea that it is zero.

The real net gain, then, is the difference between the Italian income tax you stop paying and the Albanian tax you start paying. You know the first precisely; the second is the part to have confirmed.

What it means in practice

Three things, in order. First: the benefit only exists if the pension is private. Second: it grows with the amount, and makes more sense for medium-to-high pensions than for small ones. Third: the final figure needs both halves of the sum, and the Albanian half must be checked.

To do the calculation on your case, and before taking decisions, the reference is a commercialista; the topic ties closely to that of tax residence, which we have covered separately.

It is also worth remembering that tax is only one of the factors. Healthcare, family ties and quality of life weigh at least as much as the saving on tax, and a higher net pension is not enough, on its own, to make the choice right.

To be checked

The income tax rates given here are those in force in 2025; check the verification date below, because bands and deductions can change. The tax Albania applies must be confirmed with a professional. This guide explains a way of reasoning, it is not tax advice. If you want to line up the right figures to take to a commercialista, write to us, with no obligation.