Italy

Corporate Tax Guide

Italy has a general corporate income tax rate of 24%, with an advance payment due date of 40% on the last day of the sixth month after the end of the tax year and 60% at the end of the eleventh month. Capital gains are subject to the same tax rate, but financial investments may be eligible for a 95% exemption under the PEX system. The general VAT rate is 22%. Non-residents are subject to a withholding tax of 26% on dividends and interest, and 30% on royalties. For residents, the withholding tax ranges from 0-26% on dividends and 0% on interest, with a flat rate of 26% on royalties. The CIT return is due by the end of the 9th month after the end of the tax year.

Italy Tax Brief

Data Source PwC World Tax Summary
OCED Statistic

Time of Update 4/05/2026

Italy Corporate Income Tax (CIT)

General CIT Rate:

CIT Return Due Date:

By the end of the 9th month after the end of the tax year.

CIT Payment Due Date:

The last day of the sixth month after the end of the tax year.

CIT Estimated Payment Due Date:

Advance payment: 1) Pay 40% on the last day of the sixth month after the end of the tax year, 2) Pay 60% at the end of the eleventh month after the end of the tax year.

Italy Withholding Tax (WHT)

Resident Withholding Tax (Dividend/Interest/Royalty):

0/0/0

None-Resident Withholding Tax (Dividend/Interest/Royalty):

26/26/30

Italy Value-Added Tax (VAT)

General VAT Rate:

Learn More

Italy Capital Gain Tax (CGT)

General Capital Gain Tax Rate:

Capital gains are subject to the normal corporate income tax rate. For financial investments, as long as they meet the conditions stipulated by law, they can be eligible for a 95% exemption under the PEX system.

Italy Effective Tax Rate (ETR)

Composite Effective Average Tax Rate:

21.18%

Composite Effective Marginal Tax Rate:

-22.74%

Additional info

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TKEG Expat Italy Corporate Tax Guide

Italy Value-Added Tax (VAT)

Italy Corporate Income Tax (CIT)

Italy Personal Income Tax (PIT)

Italy Capital Gains Tax (CGT)

Italy Inheritance and Gift Tax

1. Italy Value-Added Tax (VAT)

In Italy, the value-added tax (VAT), known as Imposta sul Valore Aggiunto (IVA), is a consumption tax applied to the sale of goods and the supply of services. It also applies to the importation of goods into Italy and intra-community acquisitions of goods from other EU member states. The standard VAT rate in Italy is set at 22%, but reduced rates of 4%, 5%, and 10% are applied to specific categories of goods and services. For example, the reduced 4% VAT applies to essential goods such as food and agricultural products, while the 10% rate applies to electricity and other listed utilities. The 5% rate covers certain health services and items related to children's products, among others. Exemptions from VAT exist for certain transactions, such as exports and intra-community supplies, which are not subject to VAT under Italian law. However, specific procedural requirements must be met for exemptions, including submitting declarations to Italian tax authorities. Businesses engaging in such transactions must maintain accurate records to comply with Italian VAT laws, as failure to adhere to these regulations may result in significant penalties.

References https://taxsummaries.pwc.com/italy/corporate/other-taxes

2. Italy Corporate Income Tax (CIT)

Corporate Income Tax (IRES): The standard IRES rate is 24%. Italian resident companies are taxed on worldwide income; non-residents are taxed only on Italian-sourced income.

Regional Production Tax (IRAP):
In addition to IRES, companies are subject to IRAP (Imposta Regionale sulle Attività Produttive) at a standard rate of 3.9%. Combined effective CIT rate is approximately 27.9% (IRES 24% + IRAP 3.9%).

FY2025 incentive: A reduced IRES rate of 20% applies to companies reinvesting profits in fixed assets under certain conditions.

Pillar Two – Global Minimum Tax (GMT):
Italy enacted Legislative Decree no. 209 (GMT Decree) on 28 December 2023, implementing EU Directive 2022/2523. The IIR applies to Italian parent entities with respect to foreign low-taxed constituents for fiscal years beginning on or after 31 December 2024. QDMTT and UTPR provisions remain under development as of end-2025.

References

https://taxsummaries.pwc.com/italy/corporate/taxes-on-corporate-income

3. Italy Personal Income Tax (PIT)

Italy’s personal income tax (PIT) is a progressive tax that applies to individuals based on their income. The PIT rate ranges from a lower threshold of around 23% to a top marginal rate of 43% for individuals earning higher incomes. The tax applies to income from various sources, including wages, pensions, business income, and income from real estate. Taxpayers must file their returns by 30 September or 30 November, depending on their tax status and whether they file electronically or on paper. Estimated tax payments are required during the year, with two installments due on 30 June and 30 November. The final balance of any taxes owed is due by 30 June of the following year. Italy also provides several deductions and allowances that can lower a taxpayer's overall liability, including deductions for dependent family members, mortgage interest, and certain medical expenses. Tax residents in Italy are taxed on their worldwide income, while non-residents are only taxed on their income sourced from within Italy. Additionally, special tax regimes are available for expatriates and high-net-worth individuals who move to Italy.

References https://taxsummaries.pwc.com/italy/corporate/other-taxes

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