Italy uses a progressive income tax system called IRPEF (Imposta sul Reddito delle Persone Fisiche) with rates from 23% to 43% across 3 brackets. But the headline rates are misleading—add regional surtax (1.23-3.33%) and municipal surtax (up to 0.9%) for true rates approaching 47%. A €50,000 earner pays roughly €10,900 IRPEF + €1,250 regional/municipal = €12,150 (~24%, or ~33% including social contributions). Italy offers a flat tax regime for new residents: 7% on foreign pension income or €100,000 flat on worldwide income for wealthy relocators. Rental income can use cedolare secca (flat 21% or 10%). Filing deadline is November 30 via Modello 730 or Redditi PF. Use our calculator to estimate your Italian tax liability.
Note: These are marginal rates — you only pay the higher rate on income within each bracket.
Source: Agenzia delle Entrate
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Italy has 3 IRPEF brackets: 23% up to €28,000, 33% from €28,000-€50,000, and 43% above €50,000. Note: The 2024 reform merged the old 25% bracket into the 23% bracket and reduced the middle bracket from 35% to 33%. Add regional surtax (1.23-3.33% depending on region) and municipal surtax (0-0.9%) for total rates.
Italy offers two flat tax regimes for new residents. The 'impatriate regime' gives 70-90% income exemption for workers relocating to Italy. The 'neo-resident' regime lets wealthy individuals pay €100,000/year flat tax on ALL worldwide income (plus €25,000 per family member). Pensioners moving to southern regions pay just 7% on foreign pensions for 10 years.
Cedolare secca is an optional flat tax on rental income: 21% for standard rentals or 10% for affordable housing contracts (canone concordato). This replaces IRPEF (up to 43%), registration tax, and stamp duty. It's almost always beneficial for landlords, especially those in higher tax brackets. You must notify tenants in the rental contract.
For employees, use Modello 730 (deadline usually July 23, with employer handling payment). Self-employed use Modello Redditi PF (deadline November 30). Balance payments are due June 30 (or July 30 with 0.4% surcharge). Advance payments (acconti) of 40% are due in June and 60% in November for the following year.
Italy offers 19% deductions on medical expenses (over €129 threshold), mortgage interest (up to €4,000), education costs, and charitable donations. Some expenses qualify for higher rates: 50-65% deductions for home renovations (Superbonus), 36-50% for energy efficiency improvements. Tax credits exist for dependent family members and employees.
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Last Updated: May 2026