Italy Tax Rates
Italy operates a progressive income tax system (IRPEF) with rates ranging from 23% to 43%, administered by the Agenzia delle Entrate. The Italian tax system includes national, regional, and municipal income taxes, a standard 25% corporate tax (IRES) plus a regional IRAP, and a competitive flat tax regime for new residents. Italy also offers a favorable 7% flat tax for retirees relocating to southern municipalities.
Top Income Tax Rate
43%
Corporate Tax Rate
27.9%
VAT / Sales Tax
22%
Capital Gains Tax
26%
Detailed Tax Information
Income Tax Brackets
Italy applies a progressive national income tax (IRPEF - Imposta sul Reddito delle Persone Fisiche) with three brackets as reformed in 2024: 23% up to €28,000, 35% from €28,001 to €50,000, and 43% above €50,000. In addition to national IRPEF, regional surcharges (addizionale regionale) of 1.23% to 3.33% and municipal surcharges (addizionale comunale) of up to 0.8% apply, depending on the region and municipality of residence.
| Income Range | Tax Rate |
|---|---|
| €0 – €28K | 23% |
| €28K – €50K | 35% |
| €50K+ | 43% |
Corporate Tax
Italy levies a corporate income tax (IRES - Imposta sul Reddito delle Società) at a standard rate of 24%. Additionally, a regional production tax (IRAP - Imposta Regionale sulle Attività Produttive) of 3.9% applies to the net value of production, bringing the combined effective rate to approximately 27.9%. Banks and financial institutions are subject to a higher IRES rate of 27.5%.
Standard Rate
24%
Capital Gains Tax
Capital gains from financial investments are generally taxed at a flat rate of 26% (imposta sostitutiva). Gains from Italian and EU government bonds and similar instruments benefit from a reduced rate of 12.5%. Individual investors can choose between three regimes: the dichiarativo regime (annual declaration), the risparmio amministrato (managed savings with tax applied per transaction by the intermediary), or the risparmio gestito (managed portfolio with tax on annual net gains).
Rate
26%
VAT / Sales Tax
Italy applies a standard VAT (IVA - Imposta sul Valore Aggiunto) rate of 22%, with reduced rates of 10%, 5%, and a super-reduced rate of 4% for essential goods. Italy's VAT system follows EU directives. Electronic invoicing (fatturazione elettronica) is mandatory for all B2B and B2C transactions through the Sistema di Interscambio (SDI) platform.
Standard Rate
22%
Cryptocurrency Tax
As of 2026, Italy taxes cryptocurrency gains at a flat rate of 33% (increased from 26% in 2025) on gains exceeding €2,000 per tax year. Crypto assets are classified as financial assets. The tax applies to the difference between the sale price and the average purchase cost.
Tax Treaties
Italy maintains an extensive network of approximately 100 double taxation treaties. These treaties generally follow the OECD Model Tax Convention and provide for reduced withholding rates on dividends (typically 15%), interest (typically 10%), and royalties (typically 5-10%). Italy participates actively in EU and OECD tax initiatives, including the Multilateral Instrument and automatic exchange of information under CRS.
Treaty Network
100
Double taxation agreements
Major treaty partners:
Key Details
Relocate to Italy
See how much you could save by moving here from your current country.
$-21,278
Tax in United States
$24K
24.4% effective
Tax in Italy
$46K
45.6% effective
Additional Cost
87.3%
more tax annually
US Citizens: Important Note
US citizens are taxed on worldwide income regardless of residence. You'll still need to file US taxes, though the Foreign Earned Income Exclusion and Foreign Tax Credit may reduce your liability.
