Italy
Top Income Tax
43%
Marginal rate
Corporate Tax
24%
Standard rate
VAT / Sales Tax
22%
Standard rate
Capital Gains
26%
Standard rate
Overview
Italy offers interesting options for new residents including a 100k EUR lump-sum tax on worldwide income and the Regime Forfettario for freelancers. The country has recently introduced a digital nomad visa. Rome, Milan, and smaller cities offer rich cultural experiences.
Income Tax Brackets
| Income Range (EUR) | Tax Rate |
|---|---|
| 0 - 28,000 | 23% |
| 28,000 - 50,000 | 35% |
| 50,000+ | 43% |
Plus regional (1.23-3.33%) and municipal (0-0.9%) surcharges.
Corporate Tax
Standard Rate
24%
24% IRES + 3.9% IRAP (regional production tax) = ~27.9% effective.
VAT / Sales Tax
Standard Rate
22%
Reduced Rates
4%, 5%, 10%
4% on essentials. 5% on some food/health. 10% on tourism, food, energy.
Capital Gains Tax
Standard Rate
26%
26% on financial gains. 12.5% on government bonds. Participation exemption for qualifying shareholdings.
Social Security Contributions
Employee
10%
Employer
30%
Self-Employed
26.07%
INPS contributions. Self-employed Gestione Separata: 26.07%.
Special Tax Regimes
Flat Tax for New Residents
100,000 EUR lump-sum tax on worldwide income for new Italian tax residents. 25,000 EUR for each family member.
Eligibility: Must not have been Italian tax resident in at least 9 of previous 10 years.
Regime Forfettario
15% flat tax (5% first 5 years for new activities) on business income with forfait expense deduction.
Eligibility: Self-employed/freelancers with revenue under 85,000 EUR/year.
Digital Nomad Visa
Digital nomad visa introduced 2024. Minimum annual income of 28,000 EUR. Valid for 1 year, renewable.
Pros & Cons
Pros
- 100k lump-sum tax for wealthy new residents
- Regime Forfettario 5-15% for freelancers
- Digital nomad visa
- Rich cultural lifestyle
Cons
- High top marginal rate (43%)
- Complex bureaucracy
- High employer social contributions
- Regional tax surcharges
Living Indicators
Cost of Living Index
Moderate
Quality of Life Index
Good
Best For
Data Sources
Tax rate data for Italy is compiled from the following authoritative sources:
- OECD Tax Database
- Tax Foundation International Tax Competitiveness Index
- World Bank Business Enabling Environment
- Italy government tax authority publications
- PwC Worldwide Tax Summaries
Last verified: 2024-01
Disclaimer: This content is for informational purposes only and does not constitute tax advice. Tax laws change frequently. Always consult a qualified tax professional before making decisions about your tax residency or obligations.