Personal income tax (IRPEF) rates

FY 2021 Rates of Italian Income Tax

(based on annual income)

New rates apply from 1 January 2022 – see this post

Bracket of Income (annual amounts)

Rate

Tax on Band

On the first € 15,000

23%

€ 3,450

Above  € 15,000 up to  € 28,000

27%

€ 6,960

Above  € 28,000 up to € 55,000

38%

€ 17,220

Above  € 55,000 up to € 75,000

41%

€ 25,420

Over € 75,000

43%

On top of the above rates you need to add 

the municipal tax supplement (imposta addizionale comunale) which ranges from 0.1% to 0,9%

and the 

supplemental regional tax which varies from 0.70% to 3.33% 

depending on region 

and bracket of income

Bracket of Income

Search here for your municipality and find the applicable rate for your local authority

Search here for your region and your regional tax rate

(Searches are in Italian on the Italian Ministry Web Site)

Tax Agency Table of Additional Municipal Tax Rates 2021

Bracket of Income

Imposta Sostitutiva/Substitute Tax

The rates shown above apply only to  income which is not subject to imposta sostititva (“substitute tax”) and which applies in place of the main national income, regional and comunale taxes shown above.

Examples of income that are subject to tax at the rates shown in the above table are: 

  • income from employment
  • pension income (except for qualifying pensions in the South of Italy (see below)
    income from self employment
  • rent from Italian property (where the option to substitute tax is not taken)
    rent from non Italian property 
  • royalty income 
  • miscellaneous income

Examples of income that are liable to substitute tax are:

  • income from pensions where the option to substitute tax at 7% has been taken (NB. if the option has been taken the 7% will apply to all income).
  • income from investments, interest, dividends, capital gains  – generally taxed at 26% flat rate. Lower rates may apply.  
  • income from a self employment carried out under the flat tax regime for small business
  • 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).
The substitute tax applies to investment income and rental income only where the person receiving the relevant income does not do so in the course f a business activity (e.g financial trading or carrying out a property letting business). 

6 Comments on Personal income tax (IRPEF) rates

    • Hi Anna
      As an Italian resident in receipt of pension income You can earn up to about Euro 8,000 per year by way of pension income without be liable to tax (providing you have no other income liable to tax at marginal rates). The exact amount of the threshold depends on your personal circumstances – eg. whether you have any other tax deductions or credits – e.g healthcare/pharmaceutical costs, qualifying home refurbishment/energy saving expenses etc. Above that amount you still get a tax credit for pension income but reduces in line with taxable income. All this presupposes yo do not qualify for the special regime for pensioners living in small towns in the South of Italy

  1. As a UK national now resident in Italy, my sole income is UK State Pension.
    Am I liable for Income Tax on this? If so I presume I can use the 7% flat tax for the South ( Scalea – Calabria ). Thanks.

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