Italy: personal tax guide

What the tax system covers

Ordinary Italian-resident individuals are generally taxed on worldwide income. A new-resident or employment incentive is a separate election with its own conditions; it does not change the baseline country classification.

When you become tax resident

For most of the tax year, civil-law residence, tax domicile or physical presence in Italy can independently establish residence; parts of days count. Tax domicile emphasizes personal and family relationships. Population-register enrolment creates a rebuttable presumption.

Rates and the tax base

23%, 33% and 43% national IRPEF bands. From 2026 the middle band over €28,000 to €50,000 is 33%; income above €50,000 is in the 43% band. Regional and municipal additions, credits, social contributions and substitute-tax regimes are separate.

Private investment gains and business trading

Italian residents have chargeable financial-gain categories covering disposals of securities and other specified assets. Ordinary securities, substantial holdings, property and crypto do not necessarily share one rate or computation. The Revenue Agency’s return guidance separates these categories; a professional dealing activity requires business-income analysis.

Asset cost basis on arrival

For incoming individuals' shareholdings, acquisition cost is the ordinary starting point. Agency guidance allows recognition of a higher foreign exit-tax value subject to conditions; moving to Italy does not itself reset every investment to arrival value.

• The origin country must ordinarily impose an individual departure tax and provide adequate information exchange with Italy. Preserve the foreign assessment and valuation evidence.
• The recognized uplift cannot exceed Italian normal value under TUIR Article 9. This statutory valuation standard is not automatically the arrival-day quoted price.
• The supporting guidance concerns shareholdings. Its extension to funds, cryptoassets, real estate or other assets is not established here.

Residence is a set of alternative tests, not a visa test

A person can meet the majority-of-year domicile test through personal and family connections even while travelling extensively. Counting fewer than 183 days therefore does not settle every case. Equally, registration is relevant evidence but is not the only statutory route.

Build a chronology of accommodation, family location, travel and actual work. At departure, use the same evidence to test when each connection changed. A foreign residence certificate should agree with the facts; where two countries claim residence, the particular treaty must be examined rather than assuming a permit overrides domestic law.

Worked 2026 ordinary-income calculation

For €100,000 of taxable ordinary income, the national calculation is €28,000 × 23% (€6,440), plus €22,000 × 33% (€7,260), plus €50,000 × 43% (€21,500): €35,200 before credits, regional and municipal additions and social contributions.

This is an illustration using taxable income, not gross turnover or take-home salary. Deductions change the base; credits change the tax. A pension, salary, business profit and investment receipt can enter different categories. The 33% middle band applies from 2026, so a calculation still using 35% is out of date.

Investments: identify the asset before applying 26%

The Revenue Agency separates financial-gain categories from other income. Ordinary taxable securities gains commonly fall within the 26% substitute-tax system. An illustrative €10,000 taxable gain subject to that rate produces €2,600 before any allowable loss adjustment; this does not establish that every asset disposal is taxed identically.

Collect acquisition costs, transaction fees, corporate actions and sale proceeds. Losses must be assigned to the correct income category: a portfolio loss is not automatically a deduction from salary or every dividend. Business dealing, real estate and crypto need their own classification. The 2026 changes to crypto taxation make it particularly unsafe to copy a securities rate across an entire mixed portfolio.

Foreign assets can require reporting without a disposal

The RW schedule covers reportable foreign investments, financial assets and crypto holdings; it also supports IVIE, IVAFE and crypto-asset value taxes. Reporting is not limited to an account that has paid income or an asset sold during the year.

The return guidance gives a €15,000 aggregate maximum-value exception for monitoring foreign bank deposits and accounts, while preserving filing where IVAFE is due. That exception is not a general €15,000 exemption for shares, property or crypto. Prepare a year-round ownership and valuation schedule, including jointly held assets and wallets, before deciding which entries are required.

Property income and the changed short-let limit

Eligible residential rentals can use cedolare secca instead of ordinary IRPEF: generally 21%, or 10% for qualifying agreed-rent contracts. Short lets have a 26% rate with 21% available for one property selected in the return.

From 2026, the private short-let regime is restricted to no more than two apartments in the tax period. Exceeding that limit triggers the statutory business presumption; the older four-apartment threshold is no longer the current test. Ownership taxes remain separate. For foreign property, ordinary IVIE is 1.06% of the applicable value, with ownership-period, valuation, credit and exemption rules.

Social contributions: the activity changes the calculation

For 2026, INPS sets Gestione Separata at 26.07% for covered self-employed professionals who have no other compulsory pension coverage and are not pensioners; a 24% category applies where the specified other coverage or pension conditions are met. Contribution ceilings and pension-credit mechanics must also be applied.

Artisans and commercial traders belong to different INPS management systems: published 2026 headline rates are 24% and 24.48% respectively, with minimum contributions and income-related rules. These are not universal employee payroll rates. Classify the activity and check any professional fund or cross-border social-security agreement before treating an income-tax incentive as a complete cost calculation.

Foreign tax relief needs final tax and the right income category

The foreign-tax-credit schedule concerns foreign taxes paid definitively on relevant foreign income. Provisional instalments or amounts still refundable are not treated as final tax simply because money has left the account. Retain the assessment, payment evidence, income period and any available treaty refund.

Match each item to the Italian computation and the permitted credit ceiling. A timing mismatch may require a different return treatment from a permanently irrecoverable excess. Where income falls under a substitute regime rather than ordinary taxation, establish the applicable relief rules separately. A foreign withholding slip alone does not prove that Italy will credit the full amount.

The foreign-income election is a separate comparison

The new-resident election ordinarily requires nonresidence in nine of the previous ten tax years and can last no more than fifteen years. Certain substantial foreign-shareholding gains remain outside it during the first five years, which matters when a founder expects a company sale.

For transfers covered by the 2026 amendment, the annual principal charge is €300,000 and the eligible family extension €50,000 per person. Earlier cohorts can retain earlier charges. Italian-source income remains separately relevant. Compare the fixed charge against the actual source and category of income; a large asset portfolio does not by itself make the election economical.

Incoming workers: a different incentive with different conditions

The post-2023 impatriate regime can bring only 50% of eligible Italian employment, equivalent employment and professional self-employment income into the base, within the €600,000 annual limit. It generally covers the arrival tax year and four following years.

The law requires qualifying skills, work principally in Italy and the applicable prior nonresident period. The ordinary lookback is three tax years, with longer six- or seven-year conditions in specified same-employer or group situations. The minimum residence commitment is four years; failing it can trigger recovery with interest. This is not an exemption for passive foreign income, and earlier arrival cohorts need their own law.

Returns and payments run on different calendars

Redditi PF 2026 generally reports 2025 income. The Revenue Agency gives 2 November 2026 as the electronic filing deadline for that return. This should not be described as the filing deadline for income earned during 2026.

The ordinary calendar separately places the 2025 balance and first 2026 advance payment on 30 June 2026; extensions and special taxpayer categories must be checked against their actual calendar. Prepare the income schedules, foreign tax credits, foreign asset values and social-contribution reconciliation before the payment calculation. A later return deadline does not automatically postpone the cash payment.

Before arrival or departure, coordinate the personal and company files

For a founder, make one schedule of personal assets and another of corporate assets, with planned disposals, distributions and management changes. The personal new-resident election does not decide where a foreign company is resident. A change in where the founder makes decisions can matter independently of the owner’s investment-income treatment.

At departure, identify the last eligible year of any election and preserve the original application, returns and source analysis. Retained Italian property or business activity needs its own continuing compliance schedule. Agree responsibility for the final Italian return and the first destination return before access to the old accountant, bank or records becomes difficult.

Foreign companies and income attribution

Article 167 can attribute controlled foreign-company income to resident individuals as well as companies; retaining profits overseas is not by itself protection.

Departure, migration and continuing obligations

Article 166 concerns business assets when Italy loses taxing rights, including relevant individual businesses. It is not a universal deemed disposal of all private investments on emigration.

Which version of the law this guide uses

The new income-tax code, Legislative Decree 117/2026, was published in July 2026 but applies from 1 January 2027. The Article 96, 166 and 167 references above identify the provisions used for the 2026 analysis. An “abrogated” database heading should be read with its commencement date, not treated as proof that the rule has already disappeared.