ADE Income Tax Brackets in Italy for 2024

The Italian tax system ranks 37th out of 100 in the OECD in the Tax Foundation’s International Tax Competitiveness Index (ITCI). This ranking considers over 40 variables across five categories: corporate taxes, individual taxes, consumption taxes, property taxes and international tax rules. The tax system in Italy is administered by the official tax body, Agenzia delle Entrate.

The Consolidated Income Tax Act – (TUIR) provides guidance and support in the form of income tax tables for individuals and businesses. Taxpayers must familiarize themselves with these income tax tables and the corresponding income tax brackets and income tax rates, for effective tax planning and to remain compliant with Italian tax laws.

Here you will learn about:

• headline tax rates
• personal income tax (PIT) rates 
• corporate income tax (CIT) rates 
• capital gains tax (CGT) rates 
• withholding tax rates
• value-added tax (VAT) rates

Headline Tax Rates in Italy

Personal Income Tax (PIT) Brackets for Individuals in Italy for 2024

An individual who is considered a tax resident pays tax on all income, regardless of its source, less any allowable deductions. These deductions may be for spouses, children (aged 21 and over), other dependent family members as well as deductions for certain types of expenses (such as health expenses).

An individual who is considered a non-resident is taxed only on income earned in Italy and they may only deduct certain expenses (this is a list of allowable expenses).

A third category is the individual subject to the ‘Schumacher’ ruling, that is, those who do not reside in Italy (but whose income earned in Italy is equal to at least 75% of their total income earned) and do not receive similar tax benefits where they reside. Such individuals are entitled to make any and all deductions.

A different tax regime applies to neo-domiciled individuals, that is, those who transfer their tax residency from abroad to Italy. Such individuals may apply for a flat substitutive tax, at a fixed amount of EUR 100,000. 

National Income Tax for Individuals

National income tax for FY 2024 is levied at progressive tax rates as tabulated below:

Regional Income Tax for Individuals

Individuals in Italy are subject to a regional income tax that varies from 1.23% to 3.33% depending on the region of residence.

Municipal Income Tax for Individuals

Individuals in Italy are subject to a municipal income tax that varies from 0% to 0.9% depending on the municipality of residence. Municipalities can implement progressive tax rates applicable to the national income tax brackets.

Personal Income Tax Due Dates

Corporate Income Tax (CIT) Rates in Italy for 2024

Corporate tax rates in Italy are summarised below.

Corporate Income Tax Due Dates

Capital Gains Tax (CGT) in Italy

Capital Gains Tax (CGT) in Italy and its application in respect of corporate income tax and personal income tax is summarised below.

Withholding Tax Rates for Residents and Non-Residents in Italy

In general, withholding tax (WHT) is levied on residents and non-residents in Italy. While there is a base standard WHT rate, this rate may be reduced by other domestic tax regimes and European Union Directives.

Further, Italy has a broad tax treaty network with 101 countries which may also vary WHT rates. A taxpayer may benefit from the provisions in these tax treaties. 

Value-Added Tax Rates in Italy

Value-Added Tax (VAT) rates in Italy are summarized below with application examples.