Taxes in Italy for Expats: Residence, Income and Property 

Taxes in Italy depend on whether you are a tax resident or not and the source of your income.  

Italy charges tax residents on their worldwide income and non-residents on their Italy-sourced income only.  Other important taxes are a standard VAT, extra regional and local taxes, and capital gains and dividends.  

Here is a guide to taxes in Italy, covering personal income tax, becoming a tax resident, and how our Italy immigration experts at Global Citizen Solutions (GCS) can help with your relocation and tax residency goals. 

Taxes in Italy: Key Takeaways

Italy taxes its residents on worldwide income and non-residents on Italy-sourced income 

Italy’s personal income tax is progressive, ranging from 23% to 43%, meaning the more you earn, the higher your tax rate. 

You become a tax resident in Italy by meeting a set of physical presence, habitual residence and domicile requirements. 

Having a visa or residence permit in Italy does not automatically make you a tax resident, you must meet other criteria. 

If you are a tax resident in Italy and another country, you may be eligible for relief, subject to income category, taxing rights, and qualifying foreign taxes paid. 

To become a tax resident in Italy, you need to meet at least one of these conditions for most of the tax period: 

• Physical presence: You spend at least 183 days a year in Italy (184 in a leap year), counting fractions of days. 
• Habitual residence: You have a residence or habitual abode in Italy under the civil-law residence test 
• Domicile: You have a domicile in Italy, meaning the main center of your family and personal relationships. 

If you register in the resident population register (Anagrafe) for most of the tax period, it will create a presumption of tax residence. However, you can argue this with supporting evidence.  

As a resident, you are taxed on your worldwide income, and you are required to report foreign assets, including bank accounts and property, and pay wealth taxes on them.  

You may still qualify for tax residency if you meet any of the other two conditions, even though you spend less than 183 days in the country.  

Note that simply having an Italian visa or residence permit does not automatically make you a tax resident in Italy. You must meet at least one of the criteria described above to be a tax resident.  

Domestic tests, treaties and evidence 

Italian domestic law uses statutory residence criteria for most of the tax period, and a treaty may resolve double taxation issues for those who are tax residents in two jurisdictions.  

Start by reviewing how much time you spend in Italy, where you habitually live, and where your personal and family connections are based most of the time.  

If Italy and your other base both consider you a tax resident under their domestic laws, check whether a double tax treaty between both countries exists, as you may be able to get an exemption if you have the right evidence.  

Some evidence that could support your assessment include:  

• Travel records and a calendar of days spent in each country. 
• Rental agreements, property records, and evidence of how you use your homes. 
• Information about your family location, employment, and personal relationships. 
• Population records and any foreign tax-residence certificate. 

It may be tricky to gather the right evidence, so you should use an international tax expert who can provide more insight into the treaty.  

Italian Personal Income Tax (IRPEF) 

Personal income tax, also known as Imposta sui redditi delle persone fisiche (IRPEF) in Italy, is based on how much you earn. If you are a resident, you pay tax on all your income worldwide. If you are not a resident, you only pay tax on income earned in Italy. 

 IPREF is taxed at a progressive rate, so the more you earn, the more you pay.  

Italian tax residents may be subject to the following taxes: 

• National income tax 
• Regional income tax 
• Municipal income tax 

National IRPEF Brackets 2026

Source: Agenzia delle Entrate, Modello 730/2026 instructions. 

2026 income: The middle rate falls to 33% for tax year 2026; the 23% and 43% rates and income thresholds remain unchanged. 

Regional and municipal taxes

In addition to the national tax, you must pay two local surtaxes based on where you live:

• Regional Tax: Ranges from 1.23% to 3.33% depending on the region.
• Municipal Tax: Ranges from 0% to 0.9% depending on the town/city.

Social Security is managed by Istituto Nazionale Previdenza Sociale (INPS) and is a required payment for both employers and employees. It funds pensions, unemployment support, sick leave, and maternity or paternity benefits. 

For employees  

Employees pay their Social Security through salary deductions. The employer will calculate and deduct the amount from their salary. The actual payable rates vary by the employer’s category and size, industry sector, and any other specific circumstance, and there is no single rate.  

For employers 

Employers pay their share in addition to the employee’s salary. They also remit the employee’s share and will submit the required contribution information. How much the employer pays depends on the business classification, workforce, and applicable insurance schemes. Payroll will use the relevant Istituto Nazionale della Previdenza Sociale (INPS) classification and not a flat rate.  

For Self-employed and freelancers 

Social Security contributions for self-employed persons and freelancers depend on the activity and pension coverage.  

• If you are an independent professional, such as a freelancer or consultant without a dedicated professional fund, you register for the Gestione Separata. The actual rate will depend on whether you have another pension coverage. The actual rate will depend on whether you have another pension coverage.  
• Artisans and traders fall under separate INPS schemes, and contributions usually consist of a minimum contribution and an additional contribution on income above the minimum. 
• Regulated professionals are covered by a dedicated pension, so you must check the associated rules.  

For cross-border workers 

Cross-border workers need a separate assessment of which Social Security system applies to their situation, as European coordination rules or a bilateral agreement may affect coverage. The individual’s Italian income-tax position alone will not cover Social Security contributions.  

Property taxes  

Italian property taxes are mainly set and managed by local municipalities. The system has two main taxes: Imposta Municipale Propria (IMU), which is a tax on owning property in Italy, and Tassa sui Rifiuti (TARI), which is a tax for waste collection. IMU/TARI treatment can depend on the property and municipality.  

1. IMU (Property Tax) 

IMU is the main tax on owning property in Italy. If the home is your main residence and you officially live there, you don’t pay this tax. However, luxury homes are not exempt, even if they are your main home. The basic IMU rate for a main home is 0.5% and 0.86% for other real estate. Both rates may increase or decrease.  

2. TARI (Waste Tax) 

TARI is a tax for waste collection and disposal. It is paid by the person living in the property, whether that is the owner or a tenant. The amount depends on the size of the home and how many people live there, and it can differ by city. It is paid in one or more installments based on a bill from the local municipality. 

Rental Tax 

Rental income in Italy is taxed through either a flat-rate substitute tax called Cedolare Secca or progressive IRPEF (standard income tax) brackets. Short-term rentals follow separate rules from standard residential leases. Rental-income tax is also separate from IMU and TARI, which must be assessed independently. 

Capital Gains tax 

Capital gains in Italy may arise when you sell or dispose of an asset at a higher price than its recognized tax cost. It is taxed at different flat rates depending on the type of asset and how long you hold it. Most financial assets like stocks and bonds are taxed at 26%, while Italian government bonds and certain EU or US bonds are taxed at a lower rate of 12.5%.  

Italian Corporate Tax 

Italian corporate tax is based on two main parts: a national tax and a regional tax. Most companies in Italy, such as S.r.l. and S.p.A., pay two separate taxes. 

Source: PWC 

Tax incentives for companies 

New “Hyper-Depreciation” (2026–2028): Companies investing in new Industry 4.0 equipment, like machinery or software made in the EU/EEA can increase the tax value of their investment: 

• 180% for investments up to €2.5 million 
• 100% for investments between €2.5 million and €10 million 
• Participation exemption (PEX): The 95% tax exemption on capital gains now only applies if the company owns at least 5% or the investment is worth at least €500,000. 
• Dividends: The 95% tax exemption on dividends only applies under the same rules. If not, dividends are taxed at the normal 24% corporate tax rate. 
• Pillar Two (Global Minimum Tax): Large multinational companies with annual revenue over €750 million must pay a minimum tax rate of 15%, even if they operate in lower-tax countries. 

Inheritance and gift taxes in Italy 

Italy’s inheritance and gift tax is calculated for each person receiving assets, based on their relationship to the deceased or donor, and it now follows a self-assessment process. 

Source: PWC 

In Italy, the standard VAT (IVA) rate is 22% and applies to most goods and services. There are lower rates, such as 10% for hotels and restaurants, 5% for some foods and social services, and 4% for books and basic food items. Non-EU residents can also get tax-free shopping on certain goods. 

• Standard Rate (22%): Applies to most goods like clothing, electronics, alcohol, and luxury items. 
• Reduced Rate (10%): Applies to services like transport, hotels, restaurants, and some food. 
• Reduced Rate (5%): Applies to certain foods, social services, and some healthcare services. 
• Super-Reduced Rate (4%): Applies to books, newspapers, and basic foods like milk and vegetables. 

Italy has several attractive tax regimes designed to attract high-net-worth individuals, skilled professionals, and retirees. It is possible to qualify for the tax regime when you become a tax resident after obtaining residency through programs like the Italy Golden Visa or the  Italy Elective Residence Visa.for retirees.

Note that:  

• The Article 24-bis regime substitutes a fixed annual charge for ordinary Italian income tax on covered foreign income. It is charged at €300,000, with €50,000 for each qualifying family member included, for transfers falling within its effective-date rules. 
• The Article 24-ter regime applies a 7% substitute tax to covered foreign-source income. In addition to being retired, the applicant must receive qualifying pension income and satisfy other residence requirements.  
• The current impatriate regime is not a flat tax on income. It includes only 50% of eligible income in the taxable base, with enhanced relief in specified circumstances.  

Deadlines for filing taxes depend on the return form, your category, and payment involved. 

These are the 2026 return-submission deadlines for tax year 2025.

Source: Agenzia delle Entrate’s published 2026 calendar. 

Double taxation relief 

If your income is taxable in another country, you must review the existing double taxation treaty between the two countries. Note that obtaining this relief is not automatic, and it depends on income category, taxing rights, and qualifying foreign taxes paid. Some of the countries with an existing DTR with Italy are the US, UK, France, Germany, and Sweden.