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Italy tax guide 2026
Italy taxes residents on their worldwide income through three national bands of 23%, 33% and 43%, with regional and municipal add-ons pushing the real top rate toward 45–47%. Most investment income is settled separately at a flat 26%, and a famous menu of newcomer regimes — a 50% salary exemption for inbound workers, a €300,000 lump-sum deal for the wealthy, and a 7% rate for retirees heading south — keeps Italy on every relocation shortlist.
- Rate range
- 23% – 43% (+ 1.23%–3.33% regional and up to 0.9% municipal)
- Key allowance
- Employment tax credit up to €1,955 — wipes out tax on salaries up to roughly €8,500
- Tax year
- Calendar year
- Filing deadline
- 2 November 2026 online this season — the statutory 31 October falls on a Saturday (30 September for pre-filled employee returns)
Taxes covered
- Income tax43%
National top band 43% above €50,000; regional (1.23%–3.33%) and municipal (up to 0.9%) surcharges lift the true top rate to roughly 45–47% depending on where you live.
- Dividend tax26%
26% flat, withheld at source as a final tax on dividends held privately; no option to use the progressive bands instead.
- Capital gains tax26%
26% flat on shares and financial assets; property gains join your income at band rates but go tax-free after 5 years of ownership.
- Crypto tax33%
33% substitute tax on crypto gains from 1 January 2026 (up from 26%), with a 26% carve-out for qualifying euro stablecoins.
- Social security≈ 9.19%
Employees pay roughly 9.19% of gross salary (10.19% on earnings above the first-band ceiling), withheld by the employer; a contribution cap applies to post-1995 joiners.
- Inheritance tax4% – 8%
Among Europe's mildest: 4% for spouse and children above a €1 million per-person allowance, 6% for siblings above €100,000, 8% for everyone else.
- Withholding tax26% / 30%
Non-residents: 26% final on dividends and most interest; 30% on professional fees; royalties effectively 22.5%; treaties cut the rates.
Special regimes
- Inbound-worker regime (lavoratori impatriati)
Move your tax residence to Italy for a qualifying skilled job and 50% of your employment or professional income up to €600,000 escapes tax for 5 years — 60% with a dependent child.
- Flat tax for new residents (neo-residenti)
Wealthy newcomers can replace all tax on foreign income with a fixed €300,000 a year (arrivals from 2026; earlier arrivals keep their old €100,000 or €200,000 price), plus €50,000 per family member, for up to 15 years.
- 7% pensioner regime
Retire on a foreign pension to a small town in southern Italy after 5+ years abroad and all your foreign income is taxed at a flat 7% for up to 10 years.
- Researchers and professors
Academics returning after 2+ years abroad pay tax on only 10% of their Italian salary, for 6 years — stretching to 8, 11 or 13 with a home purchase or children.
- Flat-rate scheme for the self-employed (forfettario)
Freelancers with receipts up to €85,000 can swap normal tax for a 15% flat rate on deemed profit — dropping to 5% during a new activity's first 5 years.
Recent changes
- 2026-01The middle income tax band dropped from 35% to 33% (income between €28,000 and €50,000); a €440 trim to deduction-based credits claws the benefit back above €200,000 of income.
- 2026-01Crypto gains rate rose from 26% to 33%, and the lump-sum charge for the new-resident flat tax rose from €200,000 to €300,000 for people arriving from 2026.
- 2025-01Transfers out of trusts were brought inside inheritance and gift tax.