These are the personal income tax rates (IRPEF – Imposta sul Reddito delle Persone Fisiche) that apply after 1 January 2024. For applicable rates before that date please click this link.
The rates were changed by Legislative Decree No. 216/2023, published in the Official Gazette No. 303 of 30 December 2023.
The FY 2026 Finance Law (Law No. 199 of 30 December 2025) has amended the IRPEF brackets again. Under Article 1, para 3, the second IRPEF rate is reduced from 35% to 33%, effective from 1 January 2026 (i.e. for income received in FY 2026). The FY 2026 rates may be subject to legislative amendment as part of the 2027 Budget package.
The IRPEF rates shown below, together with regional and municipal surcharges, apply to income that is not subject to imposta sostitutiva (“substitute tax”). Below the IRPEF table is a list of examples of income and gains that may be subject to Substitute Tax instead of the main national, regional, and municipal income taxes.
At the foot we have an example for a tax resident taxpayer with a mix of income subject to IRPEF, Regional and Municipal taxes as well as income subject to Substitute Tax.
IRPEF (National Income Tax)
Rates for FY 2024 and FY 2025
| Bracket of Income (annual amounts) | Rate | Cumulative Tax to Top of Band |
|---|---|---|
| On the first €28,000 | 23% | €6,440 |
| Above €28,000 up to €50,000 | 35% | €7,700 |
| Over €50,000 | 43% | — |
IRPEF (National Income Tax)
Rates for FY 2026
| Bracket of Income (annual amounts) | Rate | Cumulative Tax to Top of Band |
|---|---|---|
| On the first €28,000 | 23% | €6,440 |
| Above €28,000 up to €50,000 | 33% | €7,260 |
| Over €50,000 | 43% | — |
IRPEF (National Income Tax)
Rates for FY 2027 – Subject to Parliamentary Approval per Draft 2027 Finance Bill
| Bracket of Income (annual amounts) | Rate | Cumulative Tax to Top of Band |
|---|---|---|
| On the first €28,000 | 23% | €8,440 |
| Above €28,000 up to €55,000 | 33% | €8,910 |
| Over €55,000 | 43% | — |
Regional and Municipal Additional Taxes
On top of the above rates of national income tax you need to add
- additional regional tax (addizionale regionale) which varies from 0.70% to 3.33%; and the
- the additional municipal tax (addizionale comunale) which ranges from 0.0% to 0.9%
depending on region, municipality, brackets of income and applicable rates for the relevant tax year, which are updated from time by resolution of the Regional or Municipal authorities. The links below show the current and historical rates in force although extrapolating these is complex.
You can search below for your Region and Municipality (Comune) and find the applicable rates of Additional Regional and Municipal Taxes.
Searches are in the Italian language on the Italian Ministry Web Site and may not be up to date as some Regions and many Municipalities have not yet published the FY 2026 rates and bands.
Department of Finance Additional Regional Tax Rates
Department of Finance Additional Municipal Tax Rates
Download Department of Finance Excel Table of Additional Municipal Tax Rates 2025
Imposta Sostitutiva/Substitute Tax
The rates shown above apply only to income which is not subject to imposta sostititva (“substitute tax”). Substitute tax applies in place of the scale rates shown above of IRPEF, national income, regional and municipal tax shown above. Whether substitute tax applies – and it may apply either automatically or at the option of the taxpayer – depending on the type of income and the applicable treatment under law.
Examples of income that is subject to tax at the scale rates shown in the above tables and regional and municipal additional tax are:
- income from employment
- pension income (except for qualifying pensioners transferring residence to the South of Italy and certain distributions from regulated Italian supplementary or complimentary pension schemes
- business, trading or professional income otherwise than for taxpayers on the Regime Forfettario
- rent from Italian property (where the option to substitute tax is not taken)
- rent from non Italian property
- royalty income
- miscellaneous income
- distributions from non- EU harmonised investment funds and ETF’s
- income from pensions where the option to substitute tax at 7% has been taken (NB. if the option has been taken the 7% flat rate will apply to all non Italian source income).
- foreign-source income where election for an annual flat tax is made (HNWI regime)
- income from investments, e.g. interest, dividends, capital gains – generally taxed at 26% flat rate. Lower rates may apply (e.g. 12.5% to income from qualifying Treasury bonds)
- capital gains deriving from equity type instruments and disposals on certain financial assets (excluding gains on certain non EU harmonised investment funds and ETF’s)
- income from self employment carried out under the Regime Forfettario
- income for renting Italian property for the option for taxation at a flat rate of 21% on gross receipts has not been taken (cedolare secco).
- certain distributions from regulated Italian supplementary or complimentary pension schemes
- income from crypto assets realised otherwise in the course of a business or deemed business (e.g. mining etc.)
- capital gains from foreign currency transactions where the average balance of foreign currency accounts exceeds Euro 51,645.69 (1 million lire) for at least 7 consecutive working days during the tax year.
Rates of Imposta Sostitutiva/Substitute Tax
| Type of Income / Regime | Substitute Tax Rate |
|---|---|
| Capital gains on financial assets | 26% |
| Income from qualifying Treasury and similar bonds | 12.5% |
| Dividends on Equities and Distributions from EU harmonized funds and ETF's | 26% |
| Interest income (possibly with option to tax at scale rates) | 26% |
| Other financial income | 26% |
| Crypto‑asset gains and income (from FY 2026) | 33% |
| Crypto‑asset gains and income (up to FY 2026) and Euro‑linked electronic money tokens (EUR‑stablecoins) from FY 2026 | 26% |
| Rental income (cedolare secca) – standard rate | 21% |
| Rental income (cedolare secca) – three or more properties | 26% |
| Self‑employment income – Regime Forfettario (startup rate) | 5% |
| Self‑employment income – Regime Forfettario (standard rate) | 15% |
| Income from Italian regulated pension schemes (returns on investments) | 9% – 15% |
| Flat tax for new residents (Art. 24‑bis TUIR) | €300,000 per year |
| Additional family member under flat tax regime | €50,000 per year |
| Foreign pensioners regime (Art. 24‑ter TUIR) | 7% |
Tax Deductions and Credits
General Personal Relief/No Tax Area
There is no personal relief or general standardized deduction from income which would exempt income from tax – the rates above apply to all income received in the year.
Specific Deductions
However Italy does have a series of specific deductions and tax credits applicable to certain types of income and in the presence of certain types of expenditure.
These deductions can be of two broad types:
A deduction (deduzione) meaning that an item of expenditure, or sometimes a lump sum amount, can be deducted in calculating the base liable to IRPEF and in some case the Regional and Municipal tax bases.
A tax credit (detrazione) namely a reduction of the tax due, determined either as a statutory amount, often reducing as reportable income increases, or as a fixed proportion fo expenses incurred.
Few of these deductions are available to reduce taxable income subject to Substitute Tax or to offset the Substitute Tax due.
Social Security Contributions
Statutory contributions to Italian social security institutions are on the whole entirely deductible (in the year which they are made) in computing income from the relative employment income and from the profits deriving from self employed activities. The same may hold true for social security contributions paid under obligation of law to foreign institutions, but the position, particularly where it involves contributions to “private” pension schemes needs to be checked on a case by case basis.
Standard Tax Credits
Relief from tax for low income earners is given via tax credit which means that the tax as calculated at the rates above is offset by the credit. wholly or partially depending on total income – the higher the total income the lower the credit. The credit available depends on type of income – income from employment, pension income and income from self employment.
See this post for more information.
Specific Deductions and Credits
See this post for more information.
Example Tax Calculation
John, Italian tax resident, not benefitting from any special tax regime, has the following income in a particular Italian tax year (e.g FY 2025):
Summary of Income
State pension €14,000
Private pension annuity €14,000
EU‑harmonised fund distributions €16,000
Airbnb rental income €5,000
We assume that the AirBnB income derives from Italian located short term rentals and thus is available for taxation at the flat rate 21% Cedolare Secco. Income from long term rentals of property situated outside Italy would not qualify for this treatment
Calculation of Italian Income Tax
Notes
The above calculation is an indicative example – a real life situation may produce different results
Additional Regional and Municipal rates depend on Region/Comune of registered residence
Special rules apply where the taxpayer is not registered as resident in Italy
The above calculation does not include wealth tax or indeed any other tax apart from income taxes.
IRPEF and Regional Income Bands shown in the above table are split according to Municipal Tax Bands as these latter are, for the time being at least, different.
Note that the effect of the separation of the income between IRPEF/Regional/Municipal Tax and Substitute Tax, in this case means that the investment and rental income is taxed at a lower rate compared to the marginal IRPEF rate that would apply, if the income were subject to IRPEF on top of the assumed IRPEF base.
2 responses
I have a military pension in Poland. It is on different terms. I will buy a flat and register in Italy and I will be a resident. Where will I pay tax? In Italy or still in Poland. If in Italy, how much percent?
You need to check out the Italy Poland double tax treaty. The standard model treaty provides for taxation of pension income, by default, only in the country of tax residence, but the specific treaty needs to be checked out, as they can vary from the standard model. It depends on the kind of pension – usually special rules apply to e.g. government service pensions.