Italian 2026 Finance Bill – Key Tax Measures: Support for Middle Incomes | Incentives / “flat tax” regimes for employment income| Continued incentives for investments and capital goods (businesses)| Flat-tax/HNWI“new-resident” regime adjustments (for high net-worth individuals) | Tax-collection and “fiscal-relief” measures: debt-collection amortization, freeze for property-transfer taxes | Tax treatment of dividends, capital gains, and financial income | Sectors/Special Taxes: financial intermediaries, “windfall” taxes, bank levy

In Italy, Value Added Tax (IVA – Imposta sul Valore Aggiunto) applies to most goods and services. The standard rate is 22%, with reduced rates for specific categories to support essential goods, sectors like tourism, and social services.

Current Italian VAT Rates (IVA) – as of December 2025
Rate Description / Main Applications Common Examples
22% (Standard) Applies to most goods and services not eligible for reduced rates. Electronics, clothing, household appliances, professional services, restaurant meals (general), cars.
10% (Reduced) Tourism, certain foods, construction/renovation works, energy supplies, some agricultural products. Hotel accommodation, some restaurant services, electricity and gas for domestic use, building renovations, certain medicines.
5% (Reduced) Social and health services, certain foods, medical equipment; art, antiques and collectibles (since July 2025). Social services, some foodstuffs, performances, sales and imports of art/antiques/collectibles.
4% (Super-reduced) Basic necessities, books, newspapers, e-books, certain foods and agricultural products. Groceries (bread, milk, fruit/vegetables), books, newspapers, periodicals, medical aids for the disabled.
0% (Zero-rated) Certain exports, intra-EU supplies, international transport, some medical and educational services. Exports outside the EU, some passenger transport services.

Source: Agenzia delle Entrate (Italian Revenue Agency) – rates current as of December 2025

  • Some transactions (e.g., healthcare, education, insurance, financial services) are exempt from VAT (no VAT charged, but no input VAT recovery). 
  • Exemptions (no VAT charged, but no input VAT recovery) apply to areas like healthcare, education, insurance, and financial services.
  • Rates are set by law (DPR 633/1972 and updates) and administered by the Agenzia delle Entrate (Italian Revenue Agency).
  • Recent changes: In 2025, a 5% rate was introduced for art/antiques (from July), and some temporary reductions (e.g., on pellets) reverted to higher rates.

 

Always verify specific classifications with official sources or a tax advisor, as exact application depends on detailed criteria.

For the most up-to-date official details, check the Agenzia delle Entrate website or contact us