Italy has some of the highest tax rates in Europe, and some of the most generous deals for people who move there. Which one you get depends on how you arrive.
This guide covers Italian personal tax for people moving to or living in Italy in the 2026 tax year, which is the calendar year.
The key question is simple. Do you qualify for one of the new-resident regimes, or will you be taxed like everyone else?
What's changed: the 2026 Budget Law (Law 199/2025) raised the flat tax on foreign income for new residents from €200,000 to €300,000 a year for anyone moving from 1 January 2026. The middle income tax rate fell from 35% to 33%. Tax on crypto gains rose from 26% to 33%. Since 7 April 2026 the 7% regime for retirees covers southern towns of up to 30,000 people, up from 20,000. A new consolidated income tax code (Legislative Decree 117/2026) was published in July 2026. It renumbers the existing rules and applies from 1 January 2027.
📋 Italy tax at a glance for 2026
Topic | Details |
|---|---|
Tax system | Worldwide income for residents |
Top income tax rate | 43% above €50,000, plus regional and municipal surcharges of roughly 1.2% to 4.2% |
All-in on a US$100k salary | About 42%, or about 22% with the impatriate regime (about €87,000, single, including social security) |
Foreign income | Taxed for residents. New residents can instead pay a flat €300,000 a year, and some retirees 7% |
Dividends, interest, capital gains | 26%. A lower rate applies to government bonds |
Crypto gains | 33% from 1 January 2026 (26% on euro-pegged e-money tokens) |
Wealth taxes | IVIE: 1.06% a year on foreign property. IVAFE: 0.2% a year on foreign financial assets |
Residence at a glance | Getting in: easy (183 days of presence, registration or family life). Leaving: sticky, as any one test keeps you resident |
Double tax treaties | More than 100 in force |
The three tax regimes for new residents
Why do people still pick a country with a 43% top rate? Because Italy runs three optional regimes for people who move in.
Image 1 — Italy's tax regimes for new residents
The impatriate regime for workers
If you move to Italy to work, only 50% of your employment or professional self-employment income earned in Italy is taxed, on up to €600,000 a year. The relief covers the year you become tax resident and the next four years.
The exempt share rises to 60% if you have a child under 18 living with you in Italy. You need to meet all of these conditions:
you weren't Italian tax resident in the three tax years before you moved
you commit to staying tax resident in Italy for at least four years
you do most of your work in Italy during the tax year
you're highly qualified or specialised, which broadly means a degree or a regulated profession
The three-year wait becomes six years if you'll work for the same employer or group you worked for abroad, and seven if you also worked for them in Italy before you left. Leave within four years and you repay the tax you saved, with interest. The relief doesn't cover business income, such as profits from running a shop or trading business.
👉 Agenzia delle Entrate: impatriate workers, the regime from 2024 (in Italian)
The €300,000 flat tax on foreign income
If you live on income from outside Italy, you can pay one fixed amount each year instead of Italian tax on that foreign income. For anyone who becomes tax resident from 1 January 2026, the amount is €300,000 a year. Earlier arrivals keep the amount that applied when they moved, €200,000 or €100,000.
You must have been non-resident in Italy for at least nine of the ten tax years before the option starts.
Family members who meet the same test can join for €50,000 a year each.
The option ends after 15 years, or earlier if you pay late or move your tax residence abroad.
Inheritance and gift tax then apply only to assets in Italy.
Italian income is still taxed normally. You opt in through your tax return for the year you move or the year after.
The 7% regime for retirees in the south
If you receive a pension from a foreign payer and move your tax residence to a small town in the south, you can pay a flat 7% on all your foreign income, not just the pension. The option covers the year it takes effect and the nine years after it.
The town must be in Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise or Puglia.
It must have no more than 30,000 residents (20,000 until 7 April 2026).
Towns of up to 30,000 residents hit by the 2009 L'Aquila or 2016 central Italy earthquakes also qualify, even outside those regions.
You can't have been Italian tax resident in the previous five tax years, and you must move from a country that has a tax cooperation agreement with Italy.
👉 Agenzia delle Entrate: optional regime for foreign pensioners (in Italian)
When you become tax resident in Italy
How many days make you tax resident in Italy? You're resident for the whole of 2026 if, for most of the year (at least 183 days), you meet any one of four tests:
your habitual home is in Italy
your domicile is in Italy, meaning the place where your personal and family relationships are mainly based
you're physically present in Italy, counting part days
you're registered in the resident population register (the Anagrafe), unless you can show the registration doesn't match where you really live
Since 1 January 2024, domicile follows your personal and family life, not your economic interests. Physical presence is a test of its own, so a remote worker who spends 183 days in Italy is resident even with no home or registration there.
Italian law has no split year. Only a few treaties, including those with Switzerland and Germany, split the year when you move.
How you stop being resident
Because the tests are alternatives, you have to fail all four. That means spending fewer than 183 days in Italy, moving your family life abroad and coming off the Anagrafe. Italian citizens do this by registering with AIRE, the register of Italians living abroad, within 90 days of moving.
The usual trap is the family test. If you work abroad while your partner and children stay in Italy, your domicile can still be Italian. Italian citizens who move to a jurisdiction on Italy's list of privileged tax regimes are treated as still resident unless they prove otherwise.
👉 Agenzia delle Entrate: tax residence rules for individuals (in Italian)
👉 Ministry of Foreign Affairs: AIRE, the register of Italians living abroad (in Italian)
Income tax rates for 2026
Italy's income tax is called IRPEF. Salaries, self-employed profits, pensions and rent are taxed together on one scale.
Italy income tax (IRPEF) rates for 2026
Taxable income | Rate |
|---|---|
Up to €28,000 | 23% |
€28,001 to €50,000 | 33% (35% in 2025) |
Over €50,000 | 43% |
Source: Law 199/2025, article 1(3), which cut the middle IRPEF rate to 33% from 2026.
If your total income is over €200,000, you lose the benefit of the 2026 rate cut through reduced tax credits.
Two local surcharges sit on top. The regional surcharge starts at 1.23% and can reach 3.33% in ordinary regions. The municipal surcharge is generally capped at 0.8% (0.9% in Rome).
👉 Law 199/2025, article 1: the 2026 IRPEF rate cut and the rule for income over €200,000 (in Italian)
👉 Department of Finance: regional IRPEF surcharge (in Italian)
👉 Department of Finance: municipal IRPEF surcharge (in Italian)
Worked example
You're single and earn €87,000 (about US$100k) in 2026.
Social security is €8,303, which is deductible. Your taxable income is €78,697.
Income tax is €13,700 plus 43% of €28,697, which comes to €26,040.
Local surcharges depend on where you live. At 2.5% combined they add €1,967.
Your all-in bill is about €36,300, or 42% of your salary.
With the impatriate regime, only half of that €78,697 is taxed. Income tax falls to €10,185 and the surcharges to €984, so your all-in bill is about €19,500, or 22%, before any tax credits. Social security is still charged on your full salary.
Freelancing in Italy
Most small freelancers use the flat-rate regime, the regime forfettario. You can use it if your turnover in the previous year was no more than €85,000. One substitute tax replaces income tax and the local surcharges.
Your taxable income is your turnover multiplied by a coefficient set by law for your activity. For professional services it's generally 78%, but check your own activity code.
You deduct your compulsory social security contributions, then pay 15% on what's left, or 5% for the first five years of a genuinely new activity.
Go over €85,000 and you leave the regime the following year. Over €100,000, you leave straight away.
Freelancers without their own professional fund pay INPS's Gestione Separata: 26.07% in 2026 if you have no other pension cover, on income up to €122,295.
On turnover of €85,000 with a 78% coefficient, contributions are about €17,300 and the 15% tax about €7,350, so around 29% all-in. At US$100k (€87,000) you're above the limit. Under the normal rules, contributions of about €22,700 plus income tax and surcharges take about 51%. The impatriate regime brings that down to about 32%.
👉 Agenzia delle Entrate: the flat-rate regime (in Italian)
👉 INPS circular 8/2026: Gestione Separata rates and income ceiling for 2026 (in Italian)
Crypto, investments and pensions
How is crypto taxed in Italy? Gains on crypto-assets made from 1 January 2026 are taxed at 33%, up from 26%. There's no tax-free threshold. Euro-denominated e-money tokens stay at 26%.
Dividends, interest and gains on shares, funds and bonds are taxed at 26%, with a lower rate for government bonds.
Italy also charges two yearly taxes on what you own abroad. We treat them as wealth taxes for our ratings.
IVAFE: 0.2% of the value of foreign financial assets, or 0.4% if they're held in a jurisdiction on Italy's privileged tax regime list. Foreign bank accounts pay a fixed €34.20 each instead, or nothing if the average balance is €5,000 or less.
IVIE: 1.06% of the value of foreign property.
Foreign pensions are generally taxed on the IRPEF scale, unless a treaty gives the taxing right to the paying country.
Italy has an inheritance and gift tax. A spouse, children and parents pay 4% above €1 million each, brothers and sisters 6% above €100,000, other relatives 6% and everyone else 8%.
👉 Law 207/2024, article 1(24): the 33% tax on crypto gains from 2026 (in Italian)
👉 Agenzia delle Entrate: IVAFE rates (in Italian)
👉 Agenzia delle Entrate: IVIE rate (in Italian)
👉 Agenzia delle Entrate: inheritance and gift tax rates and allowances (in Italian)
Social security
Pension contributions for employees total 33% of pay, and the employer pays most of it. The standard employee share is 9.19%, plus 1% on pay above €56,224 in 2026. For most people who started working after 1995, contributions stop at pay of €122,295 a year.
There's no separate health contribution on your payslip. The national health service is funded through taxation.
👉 INPS: employee contribution thresholds for 2026 (in Italian)
Double tax treaties
Does Italy have double tax treaties? Yes. The Department of Finance lists conventions in force with 106 countries and territories, including the UK, the United States, Germany, France, Spain, Switzerland, the Netherlands, Ireland, Canada, Australia, the UAE, India, China, Japan and Brazil.
👉 Department of Finance: double tax conventions in force (in Italian)
The digital nomad visa
Italy has a visa for highly skilled non-EU nationals who work remotely, either self-employed or for an employer. You need:
a degree, a regulated professional qualification or equivalent professional experience
annual income of at least three times the minimum level for exemption from healthcare charges, which consulates quote at about €25,500 to €28,000
health insurance, accommodation in Italy and at least six months' experience in the work you'll be doing
You apply at the Italian consulate where you live, then for a residence permit within eight working days of arriving. The permit lasts up to one year and can be renewed each year while you still qualify.
The visa carries no tax break of its own. Spend 183 days in Italy and you're tax resident under the rules above.
Who is Italy good for?
Ratings are relative to the 150+ countries TaxPilot covers, based on 2026 rules and the all-in cost including social security.
☑️ Who is Italy good for? Tax ratings for expats in 2026
Expat profile | Italy rating | Why |
|---|---|---|
Employees | Moderate | About 22% all-in on a US$100k salary with the impatriate regime, which exempts half your pay for five years. About 42% without it. |
Freelancers (self-employed) | Poor | About 51% all-in on US$100k, or about 32% with the impatriate regime. The flat-rate regime (about 29%) stops at €85,000 of turnover, which US$100k just exceeds. |
Retirees | Poor | About 27% on a US$40k foreign pension plus US$20k of investment income, with wealth taxes on top. It drops to 7% in a qualifying southern town, which would rate Good. |
Crypto gains | Poor | 33% on gains made from 1 January 2026, up from 26%, with no tax-free threshold. Only euro-pegged e-money tokens stay at 26%. |
Investment income | Poor | 26% on dividends, interest and gains. Yearly wealth taxes on foreign assets (0.2% on financial assets, 1.06% on property) move this rating down a level from Moderate. |
Digital nomad visa | Good | Highly skilled non-EU remote workers qualify on an income of roughly €25,500 to €28,000 a year. The visa has no tax break, so you're taxed normally once resident. |
Filing and deadlines
You file in the year after the tax year. There are two returns.
Form 730: for employees and pensioners, due by 30 September. Any refund or extra tax goes through your payslip or pension.
Redditi PF: for the self-employed and anyone who can't use the 730. It's filed online between 15 April and 31 October (2 November in 2026, as 31 October falls on a Saturday).
Your return for 2026 income is therefore due in autumn 2027.
👉 Agenzia delle Entrate: when and how to file Redditi PF 2026 (in Italian)
👉 Agenzia delle Entrate: when and how to file the 730 in 2026 (in Italian)
Frequently asked questions
How much is Italy's flat tax for new residents in 2026?
It's €300,000 a year for anyone who becomes Italian tax resident from 1 January 2026, plus €50,000 a year for each family member who joins. It replaces Italian tax on foreign income for up to 15 years.
How does Italy's impatriate regime work?
If you move to Italy to work, only 50% of your employment or self-employment income is taxed for five years, on up to €600,000 a year. The exempt share is 60% with a child under 18. You can't have been Italian tax resident in the previous three years.
What is the 7% tax for retirees in Italy?
People with a foreign pension who move to a town of up to 30,000 residents in southern Italy can pay a flat 7% on all their foreign income. It covers the year the option starts and the next nine.
What are the income tax rates in Italy in 2026?
IRPEF is 23% up to €28,000, 33% from €28,001 to €50,000 and 43% above that. Regional and municipal surcharges add roughly 1.2% to 4.2%.
How is crypto taxed in Italy?
Gains on crypto-assets made from 1 January 2026 are taxed at 33%, up from 26%, with no tax-free threshold. Euro-denominated e-money tokens stay at 26%.
Important information
This article is general information and does not constitute tax, legal, immigration or financial advice, and does not create a client relationship. Tax outcomes depend on travel history, income sources, treaty status and the law applying to the relevant year. Rates, thresholds and regimes change, and some measures described may be proposed rather than enacted; this article reflects our understanding as at the date of publication. Obtain advice from a suitably qualified professional before acting or refraining from action.
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