A draft of the Italian 2026 Budget law has been published and a summary of the main terms published on the Italian Senate web page:

https://www.senato.it/service/PDF/PDFServer/BGT/1477486.pdf

The main tax measures as described on the Ministry web site,  are summarised below. The Draft Bill is now proceeding with the Parliamentary debate and approval process where it may be amended, before being published as a law toward the end of the year. 

Main Fiscal/Tax Measures in the 2026 Budget Bill (draft)

1. Income tax (IRPEF) — reduction for middle incomes

The IRPEF rate for the second tax bracket (taxable income between €28,000 and €50,000) is proposed to be reduced from 35% to 33%.

For taxpayers earning above €200,000, there is a “sterilization” mechanism: some deductions (from certain deductible expenses) would be reduced, possibly neutralising part of the benefit for high earners.

Purpose: lighten the tax burden on middle-income earners and boost net take-home pay.

2. Incentives / “flat tax” regimes for employment income

The draft bill introduces favorable tax treatment for some categories of employment income:

Salary increases from collective-bargaining renewals (2025–2026) for private-sector employees with income under €28,000 may be taxed at a substitute rate of 5%.

Bonuses, performance incentives, overtime, night shifts, holiday pay — some may be taxed at reduced rates (for instance 1% or 15%, depending on type and income threshold), instead of standard IRPEF, at least for 2026.

Electronic meal vouchers (“buoni pasto”) receive a more generous tax-exempt daily threshold: up to €10/day (was lower) if provided electronically.

These measures target wage earners — aimed at increasing net pay and supporting the labour market.

3. Continued incentives for investments and capital goods (businesses)

For businesses, the draft revives some investment-incentive mechanisms:

Reintroduction of accelerated depreciation / enhanced deduction rules (similar to the old “hyper-amortization” / “super-depreciation”) for investments in capital goods, especially those aligning with Industry 4.0-type incentives.

This is intended to spur capital expenditure and help firms modernize assets — especially useful for SMEs or firms ahead of major investments.

4. Flat-tax/HNWI“new-resident” regime adjustments (for high net-worth individuals)

The special tax regime for “new residents” (people transferring residence to Italy who produce income abroad) — the lump-sum substitute regime — is proposed to be increased: annual flat tax for these non-resident-to-Italy immigrants would go up (the draft mentions a higher fixed amount compared to previous versions).

This could impact expats or wealthy individuals planning to relocate to Italy — making it more costly to benefit from preferential taxation.

5. Tax-collection and “fiscal-relief” measures: debt-collection amortization, freeze for property-transfer taxes

The bill (in draft) revives a broad “tax amnesty / debt-rescheduling” scheme —  “Rottamazione Quinquies” — allowing taxpayers to regularize past tax / public dues (debts to the tax authorities) under favourable conditions, likely with elimination of penalties & interest.

For real-estate-related fiscal charges (registration tax, mortgage, cadastral fees) associated with transfers or property deals, the draft foresees reduced charges and a two-installment payment option (e.g. 60% by September, balance by November 2026) for qualifying cases.

These relaxations aim to ease fiscal pressure and ease administrative burdens for homeowners / debtors / small taxpayers.

6. Tax treatment of dividends, capital gains, and financial income — with stricter rules

A proposed measure increases taxation on certain dividends paid by companies or entities where the shareholder holds less than 10% — reversing a previous rule that allowed a 95% exclusion. Under the draft, such dividends would become fully taxable for the recipient.

For capital gains realized on business incomes, the draft tightens conditions for installment taxation: the period of ownership before benefiting from deferred installment taxation may increase, and the number of allowed installments would be reduced.

This suggests a shift to broader taxation of distributed profits and gains, likely to boost revenue — potentially more burdensome for small shareholders and investors.

7. Sectors / Special Taxes: financial intermediaries, “windfall” taxes, bank levy

Although not strictly a “tax cut,” the draft bill includes special levies / substitute-tax measures on banks, financial intermediaries, and insurance companies.

These could result in higher indirect costs for sectors dealing with finance and insurance, and possibly impact borrowing costs, credit availability, or financial services pricing indirectly.