Italy Income Tax Rates 2026: Personal Tax, Capital Gains and Corporate Tax
A practical guide to Italian income tax (IRPEF), tax residence, non-resident income, dividends, capital gains, corporate tax (IRES) and regional business tax (IRAP).
Italy personal income tax (IRPEF) rates for 2026
IRPEF (Imposta sul Reddito delle Persone Fisiche) is Italy's progressive personal income tax. Under Article 11 of Presidential Decree 917/1986 (TUIR), the 2026 national brackets are:
| Annual taxable income (EUR) | Marginal IRPEF rate |
|---|---|
| Up to 28,000 | 23% |
| Over 28,000 to 50,000 | 33% |
| Over 50,000 | 43% |
The rates apply progressively, not to all income at a single rate. Taxable income generally reflects permitted deductions, and the final liability may be reduced by applicable tax credits. Regional and municipal IRPEF surcharges may also apply.
Tax deductions and credits
TUIR Article 10 addresses deductible expenses, while Articles 12, 13 and 15 govern important categories of family, employment and qualifying expense credits. Availability and limits vary with personal circumstances and income.
Historical 2017-2018 brackets
For historical reference only, the earlier five-band schedule was 23% up to EUR 15,000; 27% from EUR 15,000 to EUR 28,000; 38% from EUR 28,000 to EUR 55,000; 41% from EUR 55,000 to EUR 75,000; and 43% above EUR 75,000. These are not the 2026 brackets.
Solidarity contribution
The former additional 3% solidarity contribution on high income was a historical measure and should not be presented as a generally applicable 2026 personal income tax surcharge.
Italian tax residence and taxation of non-residents
TUIR Article 2, as amended by Legislative Decree 209/2023, defines individual residence for income tax purposes. A person is generally resident when, for most of the tax year (including fractions of days), they have civil-law residence or domicile in Italy, or are physically present there. Domicile for this purpose focuses on principal personal and family relationships. Registration in the resident population register for most of the year creates a rebuttable presumption.
Residents are generally taxed on worldwide income, subject to treaty relief and statutory exceptions. Non-residents are generally taxed on Italian-source income under TUIR Articles 3 and 23. Employment, property, business income and investment returns may have different source and withholding rules. Double-tax treaties can alter domestic outcomes.
Capital gains, interest and dividends in Italy
Many investment capital gains and dividends received by individuals outside a business are subject to a 26% substitute tax or withholding regime, depending on the asset and circumstances. Certain government bonds and qualifying public debt instruments can benefit from a 12.5% regime. Real estate gains, business assets, participation disposals and foreign investments require separate analysis.
Capital gains are generally profits on disposal of assets; dividends are distributions of company profits to shareholders; interest is remuneration for lending or deposits. Their treatment is not interchangeable. Relevant provisions include TUIR Articles 44, 67 and 68 and Legislative Decree 461/1997.
Company share disposals and participation exemption
Under TUIR Article 87, qualifying corporate participation gains may be 95% exempt from IRES if the statutory holding-period, accounting, residence and business-activity conditions are met. The exemption is not automatic for every share sale.
Corporate income tax (IRES) and IRAP
IRES (Imposta sul Reddito delle Società) is the national corporate income tax, generally levied at 24% under TUIR Article 77. Some entities and sectors face additional levies, special rules or temporary measures; the effective burden can differ.
| Tax or taxpayer category | General framework |
|---|---|
| Ordinary IRES | 24% standard rate |
| Banking and financial entities | Potential additional IRES surcharge or sector-specific rules |
| Non-operating companies | Special anti-avoidance and minimum-income rules; verify the current regime |
| IRAP - ordinary activities | 3.9% standard benchmark, subject to regional and sector rules |
| IRAP - banks and financial entities | 4.65% benchmark, subject to regional variations |
| IRAP - insurance companies | 5.9% benchmark, subject to regional variations |
IRAP (Imposta Regionale sulle Attività Produttive) is a regional tax on the net value of production, not simply another tax on corporate taxable profit. Its framework is set out in Legislative Decree 446/1997. Rates and taxable bases can vary by region and business sector. IRAP was abolished for many natural persons carrying on business or professional activities from 2022; it remains relevant to many companies and other entities.
Italian income tax returns and official guidance
Individuals may file through the applicable Modello 730 or Modello Redditi Persone Fisiche; companies generally use the relevant Redditi return and, where applicable, an IRAP return. Filing obligations and deadlines depend on the tax year, residence status, income sources and current instructions.
Consult the Agenzia delle Entrate for current forms, filing instructions, circulars and administrative guidance; Normattiva for consolidated statutes; and the Italian Department of Finance for tax policy and regional or municipal tax information.
For cross-border situations, confirm the relevant double-tax treaty, applicable year, and any special expatriate or investment regime before calculating tax.