Short answer: Italy taxes residents on their worldwide income and non-residents mainly on Italian-source income. For 2026 the national IRPEF brackets are 23% up to €28,000, 33% from €28,001 to €50,000, and 43% above €50,000. Residents also pay a regional surcharge of roughly 1.23% to 3.33% and a municipal surcharge of up to 0.8% (0.9% in Rome), so the top marginal rate lands near 45% to 47% depending on where you live. The 33% middle rate is confirmed by MEF's 2026 Budget Law summary and the Agenzia delle Entrate IRPEF page.
This is general information, not tax advice. Your Italian tax position depends on your residence status, income type, treaty position, region, municipality and family situation. Confirm the details with a qualified Italian commercialista before you file or move.
Key 2026 Takeaways
The middle IRPEF rate is 33% for 2026, down from 35%, and it applies to income between €28,000 and €50,000. Above €200,000 of total income the saving is cancelled: a €440 cut to your deductions wipes it out, and that sits on top of the existing €260 deduction cut that already applies above €50,000.
Tax residence decides everything. A resident is taxed on worldwide income and must report foreign assets. A non-resident is generally taxed only on Italian-source income.
Municipal income tax is not IMU. The municipal income surcharge is a layer of income tax; IMU is a separate property tax.
Italy's expat regimes are generous but strict. The new-resident flat tax (€300,000), the impatriati 50% exemption, the 7% retiree regime and the 15% forfettario each have hard entry conditions, and choosing one can rule out another.
What Changed in 2026
| Change | 2026 position | Primary source |
|---|---|---|
| IRPEF middle bracket | Cut from 35% to 33% on income between €28,000 and €50,000. The benefit is neutralised above €200,000 by a €440 reduction in deductions, on top of the existing €260 reduction above €50,000. | MEF 2026 Budget Law; Agenzia delle Entrate IRPEF page |
| New-resident flat tax | The substitute tax on foreign income rises to €300,000 per year, plus €50,000 per family member, for anyone transferring tax residence from 1 January 2026. People who moved earlier stay at the previous €200,000. | Agenzia delle Entrate, regime neo-residenti (art. 24-bis TUIR) |
| Forfettario employee-income bar | The prior-year employment or pension income ceiling that blocks access to the 15% regime rises from €30,000 to €35,000 for 2026. | MEF 2026 Budget Law |
| 7% retiree regime | From 7 April 2026, the eligible-municipality population limit is 30,000 inhabitants, raised from the previous 20,000 limit. | Agenzia delle Entrate, regime pensionati esteri; Gazzetta Ufficiale Legge 34/2026, art. 26 |
Resident vs Non-Resident Tax Treatment
For expats the first question is not the tax rate. It is whether Italy treats you as tax resident for the year.
Since 2024 you are an Italian tax resident if, for more than 183 days in the year (counting parts of days), you have your residence or domicile in Italy, are physically present in Italy, or are registered with the resident population (anagrafe). Domicile means the place where your personal and family ties are mainly centred. Meeting any one of these tests is enough.
| Status | How Italy taxes you | What it means in practice |
|---|---|---|
| Italian tax resident | Taxed on worldwide income, with foreign-asset reporting (the RW section) to consider. | Foreign salary, pensions, dividends, interest, rent and overseas assets can all enter your Italian return. |
| Non-resident | Taxed in Italy only on Italian-source income. | Italian salary, Italian rent, Italian property and other Italian-source income remain taxable here. |
| Treaty tie-breaker | A double-tax treaty can override the domestic test. | If two countries both claim you, the treaty decides. Do not rely on a day-count alone. |
The 183-day test is all-or-nothing. Cross it and you are resident for the entire tax year, not only for the days after the threshold.
Italy Income Tax Rates for 2026
Italy's national income tax is IRPEF. The brackets below are the national rates only. Regional and municipal surcharges come on top and depend on where you are resident.
| Taxable income | National IRPEF rate (2026) | Tax on the band |
|---|---|---|
| Up to €28,000 | 23% | up to €6,440 |
| €28,001 to €50,000 | 33% | up to €7,260 |
| Over €50,000 | 43% | €13,700 on the first €50,000, then 43% on the rest |
Above €200,000 of total income the 33% saving disappears. The law cuts your available deductions by €440, almost exactly the maximum benefit of the rate reduction, and this is in addition to the €260 deduction cut that already applies above €50,000. MEF's Budget Law summary sets out both measures.
Here is how the brackets stack up for someone with €60,000 of taxable income in 2026:
| Band | Calculation | Tax |
|---|---|---|
| 23% up to €28,000 | 0.23 × €28,000 | €6,440 |
| 33% on €28,000 to €50,000 | 0.33 × €22,000 | €7,260 |
| 43% on €50,000 to €60,000 | 0.43 × €10,000 | €4,300 |
| National IRPEF total | €18,000 |
On €60,000 that is €18,000 of national IRPEF before surcharges and tax credits. Add a regional surcharge (roughly €738 to €1,998) and a municipal surcharge (up to about €480), and the gross bill is around €18,700 to €20,500, an effective rate near 31% to 34%. Work and family tax credits (detrazioni) then reduce what you actually pay.
Regional and Municipal Surcharges
IRPEF is only the national layer. Residents also pay regional and municipal income surcharges, and these vary a lot by location.
| Surcharge | 2026 rate | Notes |
|---|---|---|
| Regional (addizionale regionale) | 1.23% base, up to about 3.33% | Each region sets its own rate within the national ceiling, so the same salary can cost more in one region than another. |
| Municipal (addizionale comunale) | Up to 0.8% (0.9% in Rome) | Set by your comune. Many charge less or apply an exemption threshold. |
| Combined top marginal | About 45% to 47% | 43% national plus surcharges, depending on region and municipality. There is no single national figure. |
The 1.23% regional floor and the 0.8% municipal cap (0.9% for Rome) are set nationally by the Department of Finance, while your exact rate is fixed by your region and comune.
Special Tax Regimes for Expats
Italy has several regimes that can change the outcome for new arrivals. They are not interchangeable, and opting into one can lock you out of another. Here are the headline numbers and the conditions that actually gate them.
| Regime | Who it fits | Headline 2026 terms | Primary source |
|---|---|---|---|
| New-resident flat tax | High-net-worth individuals with large foreign income | €300,000 per year flat substitute tax on all foreign income, plus €50,000 per family member, for up to 15 years. Applies to residence transferred from 1 January 2026; earlier movers stay at €200,000. | Agenzia delle Entrate (art. 24-bis TUIR) |
| Impatriati (inbound workers) | Qualifying workers moving tax residence to Italy | 50% of Italian employment or self-employment income is tax-free (60% if you relocate with a minor child, or have a child during the benefit), up to €600,000 per year, for 5 years. Needs at least 3 years of prior non-residence (6 to 7 if you keep the same employer or group), a high-qualification profile, and a commitment to stay resident for 4 years. | D.Lgs. 209/2023, art. 5 |
| Retiree 7% flat tax | Foreign-pension retirees moving to small southern towns | 7% on all foreign-source income for 9 tax periods (the year the option takes effect plus the following 8). The town must have 30,000 or fewer residents and be in Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise or Puglia (or a designated earthquake area). | Agenzia delle Entrate (art. 24-ter TUIR); Gazzetta Ufficiale Legge 34/2026, art. 26 |
| Regime forfettario | Small sole traders and self-employed | 15% flat substitute tax (5% for the first 5 years of a new activity) if revenue is €85,000 or less. Blocked if your prior-year employment or pension income topped €35,000, and you exit immediately if revenue passes €100,000. | Agenzia delle Entrate; L. 190/2014; MEF 2026 Budget Law |
Full conditions are on the Agenzia delle Entrate pages for the new-resident regime, the impatriati regime, the 7% retiree regime and the forfettario.
Social Security and Work Status
Income tax is only part of the cost of working in Italy. Employees, directors, collaborators and self-employed workers can sit in different social-security regimes.
| Worker type | Main issue | What to check before moving |
|---|---|---|
| Employee | Payroll withholding plus employer and employee social-security contributions. | Italian payroll setup, treaty or posted-worker certificates, benefits and health coverage. |
| Self-employed / Partita IVA | Income tax, VAT position and INPS contributions. | Whether you belong in a professional fund, the gestione separata, or another contribution category. |
| Remote worker for a foreign employer | Permanent-establishment, payroll, social-security and residence risk. | Employer setup, treaty position, and whether workdays in Italy trigger Italian obligations. |
| Company director or consultant | Classification and contribution regime can differ from ordinary employment. | Contract classification and withholding obligations. |
If you register a Partita IVA you usually charge VAT (IVA) on your invoices. The standard rate is 22%, with reduced rates of 10%, 5% and 4% for specific goods and services. Forfettario taxpayers are the main exception: they do not charge VAT. The rate categories are on the Agenzia delle Entrate VAT page.
Planning your move? Movingto's Italy tax services coordinate the whole picture with a licensed Italian commercialista, including Italy tax residence setup for your codice fiscale and special-regime eligibility, and the Italy self-employment visa route for the Partita IVA.
Property, Foreign Assets and Wealth Taxes
Italian tax residents may need to report foreign assets as well as Italian income. Property owners also need to keep income tax separate from property-related local taxes.
| Tax | Who pays | 2026 rate or rule |
|---|---|---|
| IMU | Owners of Italian property | Municipal property tax. Standard 0.86%, set by each comune between 0.86% and 1.06%. Your non-luxury main home is exempt; luxury main homes (categories A/1, A/8, A/9) pay 0.5% to 0.6%. |
| TARI | Occupiers or owners | Municipal waste tax, billed locally on property size and use. |
| IVIE | Residents with foreign real estate | 1.06% of value (0.4% if it is your main home abroad). Nothing is due if it works out at €200 or less. |
| IVAFE | Residents with foreign financial assets | 0.2% of value (0.4% for assets in tax-haven jurisdictions), plus €34.20 per foreign bank account, waived if the average balance is €5,000 or less. |
| Imposta di bollo | Holders of Italian accounts | €34.20 per year on Italian bank and postal accounts (waived under a €5,000 average), and 0.2% on other Italian financial products. |
IMU rates come from the Department of Finance; the IVIE and IVAFE rates are on the Agenzia delle Entrate.
Because foreign-asset reporting is penalty-sensitive, do not wait until the filing deadline to reconstruct balances, statements and acquisition values.
Capital Gains and Inheritance Tax
Capital gains on financial investments are taxed at a flat 26% for individuals, separate from IRPEF. A reduced 12.5% rate applies to interest and gains on Italian and white-list government bonds. (Agenzia delle Entrate)
Italy taxes inheritances and gifts at the same rates, based on how closely the beneficiary is related to the deceased or donor. The rate applies only to the value above a tax-free allowance for the closest relatives; more distant and unrelated beneficiaries get no allowance. The 2024 reform (D.Lgs. 139/2024) kept the rates and allowances and, from 2025, moved the tax to self-assessment.
| Relationship to the deceased or donor | Rate | Tax-free allowance per beneficiary | Primary source |
|---|---|---|---|
| Spouse, children, and other relatives in the direct line (parents, grandchildren) | 4% | €1,000,000 | Agenzia delle Entrate |
| Siblings | 6% | €100,000 | Agenzia delle Entrate |
| Other relatives up to the 4th degree, and relatives by marriage | 6% | None | Agenzia delle Entrate |
| Any other person | 8% | None | Agenzia delle Entrate |
A beneficiary with a serious disability has a €1,500,000 allowance regardless of relationship. When the estate or gift includes real estate, a 2% mortgage tax (imposta ipotecaria) and a 1% cadastral tax (imposta catastale) also apply, each with a €200 minimum.
Filing Deadlines and Payments
Italy uses different return forms depending on your situation. The 2026 dates below are the deadlines for reporting your 2025 income.
| Item | 2026 deadline | What to prepare |
|---|---|---|
| Modello 730 (employees, pensioners) | 30 September 2026 | Income certifications (CU), deductible expenses, family details, codice fiscale. |
| Modello Redditi PF (self-employed, foreign income, complex cases) | 2 November 2026 (the statutory 31 October falls on a Saturday) | Foreign income and assets, rental income, business data, prior-year credits. |
| Balance and first advance (saldo and primo acconto) | 30 June 2026, or by 30 July with a 0.40% surcharge | Cash for last year's balance plus the first instalment of this year's tax. |
| Second advance (secondo acconto) | 30 November 2026 | The advance is split 40% in June and 60% in November when it is €257.52 or more. |
| Codice fiscale | Before most tax and admin steps | Foreign nationals can request one from the Agenzia delle Entrate. |
These dates follow the Agenzia delle Entrate filing calendar. Always check the current-year instructions, because weekend shifts and form-specific rules move individual dates.
US Taxpayers Moving to Italy
US citizens and green-card holders usually keep their US filing duties even after becoming Italian tax resident. The Italy analysis and the US analysis need to be run together.
| Issue | Why it matters | Planning note |
|---|---|---|
| Double taxation | Italy may tax worldwide income once you are resident; the US may still require reporting. | Coordinate foreign tax credits, treaty positions and timing before the move. |
| Foreign accounts | Italian reporting and US reporting (FBAR, FATCA) can both apply. | Keep year-end statements and maximum balances for each account. |
| Investments | Funds, pensions and wrappers may be treated differently by Italy and the US. | Review holdings before changing residence, especially pooled funds and retirement accounts. |
How These Figures Are Sourced
Every rate on this page is tied to Italian primary law or the tax authority, not to second-hand summaries. Where a number is set locally, we say so, because your exact rate depends on your region and comune.
| Figure | Source | How to use it |
|---|---|---|
| 2026 IRPEF rates and the 33% middle bracket | MEF 2026 Budget Law and the Agenzia delle Entrate IRPEF page | Controlling. Safe to rely on for the national brackets. |
| Expat regimes (€300k flat tax, impatriati 50%/60%, 7% retiree, 15% forfettario) | TUIR art. 24-bis and 24-ter, D.Lgs. 209/2023 art. 5, L. 190/2014 and the Agenzia delle Entrate | Controlling on the terms, but personal eligibility is fact-specific. Check the entry conditions. |
| Regional and municipal surcharges, IMU | National floor and ceiling from the Department of Finance; the applied rate is set by your region and comune | Confirm the exact rate for your specific location. |
| Filing deadlines | Agenzia delle Entrate filing calendar | Re-check each year, because weekend shifts move individual dates. |
Common Mistakes
Using the old 35% middle IRPEF rate for 2026.
Treating a stay of fewer than 183 days as automatically safe when domicile, habitual abode, registration, treaty or work-pattern facts point the other way.
Calling the municipal income surcharge IMU. IMU is a property tax.
Forgetting the regional and municipal surcharges when you estimate take-home pay, because they can add several points to the headline rate.
Leaving foreign-asset (RW) reporting until after the deadline.
Assuming an expat regime applies before checking the exact entry conditions: prior non-residence years, qualification, town size and income caps.
Planning the Italian return without coordinating US, UK or other home-country reporting.
Related Italy guides: Italy Golden Visa · Elective Residency Visa · Retire in Italy