The essential guide for foreigners.
Italy taxes individuals and businesses through IRPEF (personal), IRES and IRAP (corporate), and the forfettario regime. Non-residents are taxed only on Italian-source income, while residents are taxed on worldwide income. Recent reforms (L. 199/2025 Budget Law; D.Lgs. 139/2024) introduced the new substitute tax regime at €300,000/year for new residents, modifications to inheritance tax (separate €1M thresholds for gifts and inheritances), and increased IVIE/IVAFE rates on foreign assets. This pillar covers every major foreign-tax interaction with Italy as of June 2026.
IRPEF applies to worldwide income of Italian tax residents on a progressive scale: 23% up to €28,000; 35% from €28,001 to €50,000; 43% above €50,000 (2026 brackets). Regional and municipal addizionali typically add 1.5%-3.4% on top. The 5% forfettario regime stays attractive for freelancers under €85,000 turnover in their first five years.
Italian SRLs and S.p.A.s pay IRES at 24% on worldwide profits, plus IRAP at 3.9% on the net production value (broad base, often reduced by labor deductions in service businesses). The combined effective rate for service SRLs typically lands at 22-25%. Innovative startups (SRL Innovativa) get a reduced 15% IRES for up to 5 years.
Italian tax residents must declare and pay IVIE (1.06% on foreign real estate) and IVAFE (0.2% on foreign financial assets; 0.4% if held in non-cooperative jurisdictions). A fixed €34.20 tax applies per foreign bank account with average balance below €5,000. Declaration is mandatory regardless of value via Quadro RW.
Article 24-bis TUIR, updated by L. 199/2025, allows individuals who have been non-resident for 9 of the last 10 years to opt for a flat €300,000/year tax on all foreign-source income for up to 15 years. Italian-source income is taxed separately under normal rules. The election is irrevocable and must be exercised in the first year of Italian residency.
Rates are 4% for direct-line relatives (with €1,000,000 exemption), 6% for siblings (€100,000 exemption), and 8% for others, all subject to the 2026 reform separating gift and inheritance thresholds. Non-residents pay Italian inheritance tax only on Italian-located assets.
The flat 5% tax for freelancers under €85K turnover (with 0% for the first 5 years).
€250K-€2M investment → 2-year residence permit, renewal possible up to long-term EU residency.
Choose between limited company and freelance based on your turnover and risk profile.
Wealth taxes on foreign real estate and financial assets — must declare each year.
26% capital gains, rising to 33% from January 2026. Staking and airdrops taxed separately.
4-8% based on relationship; €1M threshold for direct-line relatives.
€250K-€2M options, application process, the €300K substitute tax.
Step-by-step for freelancers: requirements, 5% rate, INPS contributions.
Becoming tax resident: the 183-day test, family implications, treaty positions.
Compare corporate tax, expat regimes, and lifestyle across three Mediterranean countries.
For non-EU citizens: Visa d’Oro, Impatriati regime, or naturalization paths.
Italian banks for non-residents and Americans — what works in 2026.
Yes. All articles are reviewed against Italian Revenue Agency and Gazzetta Ufficiale updates through 30 June 2026.
Only on Italian-source income. Foreign-source income is generally not taxed unless you opt for the new €300,000 substitute tax regime.
Yes, through the 730 form or Modello Redditi. We recommend a commercialista for non-residents to avoid penalties.
