Italy Tax Rates 2026: IRPEF, IRES, IRAP, VAT, Capital Gains & Withholding Tax

Italy Personal Income Tax Rates (IRPEF) for 2026

Italy applies progressive personal income tax known as IRPEF. From 1 January 2026, the second national IRPEF rate was reduced from 35% to 33% by the 2026 Budget Law. The current national brackets are:

Annual taxable income	IRPEF rate
Up to �28,000	23%
Over �28,000 and up to �50,000	33%
Over �50,000	43%

The rates are progressive: each rate applies only to the portion of taxable income falling within that band. Tax deductions and credits may reduce the final amount payable.

Regional and municipal additions: in addition to national IRPEF, taxpayers can be liable to regional and municipal IRPEF surcharges. Their rates vary according to the Region, municipality and, in some cases, income band.

Tax Residence and Scope of Italian Income Tax

Italian tax residents are generally subject to Italian income tax on worldwide income, while non-residents are generally taxed on Italian-source income. Residence is determined under the statutory rules and relevant treaty provisions.

Foreign taxes paid on income that is also taxable in Italy may qualify for a foreign tax credit, subject to the conditions and limits contained in Italian law and any applicable double-tax treaty.

Employment income is normally subject to withholding through payroll. Self-employed persons and businesses generally make advance payments and settle the final tax through the annual return.

Italy Corporate Tax: IRES and IRAP

24%General IRES corporate income tax

3.9%General IRAP base rate

22%Standard VAT rate

The general Italian corporate income tax (IRES) rate is 24%. Resident companies are generally taxable on worldwide income, subject to statutory exemptions, deductions and international tax rules.

IRAP, the regional tax on productive activities, is generally charged at a base rate of 3.9%. Regions may adjust the rate and special rates apply to certain sectors. The IRAP taxable base is determined under rules that differ from the IRES tax base.

Participation exemption

Capital gains realized by companies on qualifying shareholdings can benefit from the Italian participation exemption regime, under which 95% of an eligible gain is generally exempt if the statutory conditions are met. Consequently, only 5% of the qualifying gain is included in taxable income for IRES purposes.

Italy VAT Rates

The standard Italian Value Added Tax (IVA) rate is 22%. Reduced rates apply to specified goods and services.

VAT rate	General use
22%	Standard rate for supplies not qualifying for a reduced rate or exemption
10%	Reduced rate for specified goods and services, including certain building and accommodation-related supplies
5%	Reduced rate for specified qualifying supplies
4%	Super-reduced rate for certain essential or specifically listed goods and services

The correct rate depends on the precise transaction and the schedules to the Italian VAT law.

Capital Gains and Investment Income

For individuals outside a business activity, many financial capital gains and other qualifying financial income are subject to a 26% substitute tax. Special rules continue to apply to particular assets and instruments, including certain government securities and historic categories of gains.

Capital gains realized by a company are generally included in business income and subject to IRES at 24%, unless a specific exemption such as the participation exemption applies.

Tax Deducted at Source / Withholding Tax in Italy

Italian employers normally withhold IRPEF and applicable local additions from employment income. Withholding also applies to several categories of investment, professional and cross-border payments.

Payment type	General domestic treatment
Salary and employment income	IRPEF is normally withheld by the employer according to the applicable progressive rates and deductions.
Dividends to individuals	A 26% withholding/substitute tax generally applies to many dividend payments to individuals outside a business activity.
Financial interest	A 26% rate generally applies to many categories of financial interest, with special lower rates for certain qualifying securities.
Royalties paid to non-residents	Domestic withholding can apply; the effective burden may depend on the taxable portion, treaty relief and EU rules.
Payments to non-residents	Rates may be reduced or eliminated under an applicable double-tax treaty or EU Parent-Subsidiary / Interest-Royalties rules where all conditions are satisfied.

Cross-border payments: treaty or EU relief should not be assumed automatically. Eligibility, beneficial ownership, documentation and other statutory conditions must be checked before applying a reduced or zero withholding rate.

Italy Tax Return Filing and Payment Dates

The Italian individual tax year normally follows the calendar year and ends on 31 December.

2026 compliance item	Current deadline / position
730/2026 pre-filled return	30 September 2026 is the principal online filing deadline.
REDDITI Persone Fisiche 2026 � electronic filing	2 November 2026, because 31 October 2026 falls on a Saturday.
REDDITI PF 2026 � paper filing where permitted	30 June 2026.
IRPEF balance for 2025 and first advance for 2026	Generally due from 30 June 2026, subject to taxpayer-specific extensions, instalments and statutory postponements.
Second or single advance payment	Generally 30 November 2026 for taxpayers within the relevant return/payment system.

Companies and other entities follow deadlines based on their accounting period, return type and approval dates. Taxpayers should check the current Agenzia delle Entrate calendar because extensions and special deadlines may apply.

Official Italian Tax Resources

Information note: Italian taxation depends on residence, income type, deductions, local surcharges, business structure, treaty entitlement and other facts. This page provides a general summary of current rates and should be checked against the applicable legislation and official guidance for a particular transaction or taxpayer.

Italy Tax Rates 2026