Italian 2026 Finance Bill – Key Tax Measures: Support for Middle and Low Incomes | Revision of IRPEF tax brackets | Abolition of reduced 21% rate on short term lettings | Baby bonus | Enhanced parental leave and nursery bonus | Social security exemption for working mothers | Increased deductions for private school expenses | Family endowment fund | First home mortgage guarantee fund | Support for food purchases | Energy-efficient appliance bonus | Cap on deductions for incomes over €75,000 | Exceptions for healthcare, mortgages, and startup investments | End of deductions for children over 30 (except disabled children) | “Hire more, pay less” tax deduction for new permanent hires | Reduced tax on productivity bonuses | Fringe benefit exemptions | Relocation support for new hires | Raised flat tax threshold for employees and pensioners | Reduced corporate tax (IRES) for reinvested profits | Tax credits for southern Italy investments | Enhanced “Nuova Sabatini” machinery financing | Support for SME stock market listings | Increased public investment in defense, infrastructure, and healthcare | Banking and Insurance | Deferred deductions for financial sector losses | Annual stamp duty on life insurance contracts

More info: Taxing.it Updates

UK Italy Double Tax Treaty – Income Taxes

The UK/Italy Convention for the Avoidance of Double Taxation of Income (or Double Tax Treaty) was signed at Pallanza on 21 October 1988. It entered into force on 31 December 1990. It came into effect in the United Kingdom from 1 January 1991 for petroleum revenue tax, from 1 April 1991 for corporation tax and from 6 April 1991 for income tax and capital gains tax

It was ratified in Italy by Law no. 329 of 5 November 1990 and came into effect generally in Italy from 1 January 1991.

The Italian version is here

The text of the treaty is based on the model treaty published by the OECD in effect at the time of signature. Worthy of the note are the provisions extending the tax credit on dividends paid by companies resident in one signatory state to recipients resident in the other. Due to intervening reduction of the tax credit under both country’s domestic legislation in the meantime, these provisions are now redundant.

If you require any help with the interpretion of the treaty or how it affects you, please get in touch by clicking here

Text of the Treaty

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