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Measure Name
Date when measure came into force
Several changes 2014/01/01
Separate taxation - Rate change 2014/05/28
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Generic Tax Name Personal income tax
Tax name in the national language Imposta sul reddito delle persone fisiche
Tax name in English Personal income tax
Member State IT-Italy
Tax in force since 1974/01/01
If abolished, date on which the tax ceases to apply
Business version date 2015/01/01
Version date 2015/02/17
This file was last updated on

Type of tax
Direct taxes Personal income tax
Corporate income tax
Other

Indirect taxes VAT
Excise duty (EU harmonised)
Alcoholic beverages
Energy products and electricity
Manufactured tobacco
Other

Social security contribution Employers
Employees
Other
 
Legal base

DPR n.600/1973; DPR n° 917 of 22 December 1986; DPR n. 239/1996; DLgs. n° 241 (art. 1) of 9 July 1997; DL n° 314 of 2 September 1997; DL n° 358 (art. 1-6) of 8 October 1997; DL n° 446 (art. 1, 2, 3, 4, 10, 40, 46-50) of 15 December 1997; DL n° 360 (art. 1) of 28 September 1998; L n° 296/2006. D.L. n° 78 (art. 14) of 31 May 2010

Article 1, paragraph 11, of Decree-Law no. 138 of 2011; Article 13, paragraph 16, of Decree-Law no. 201 of 2011.

D.lgs. 14/03/2011 n. 23

 
Who sets
The tax rate is set by




The tax base is set by




The reliefs are set by




Comments
 
Beneficiary





Comments

 
Geographical Scope

 
Taxpayers
Domestic-source income of non-residents is Taxed
Not Taxed
Comments

Employment incomes of married couples are Taxed jointly
Taxed separately
Comments


Comments

Individuals, including non‑residents.

 
Tax object and basis of assessment
As general rule, taxable income under personal income tax includes























Comments

Income considered Domestic income
Worldwide income (subject to double-tax relief)
Comments

Benefits in kind
The following benefits in kind are usually (partially or fully) taxable












Comments


Comments

Total net income, including:

1.for residents, worldwide income; for non‑residents, Italian income only;

2.income not derived by the taxpayer but fully available to him;

3.income imputed to such persons as a result of family relationships;

4.income arising from family businesses;

5.income arising from shares in partnerships.

 
Deductions, Allowances, Credits, Exemptions
Deduction for professional expenses.
The deduction is:





Comments

Deductions from the tax base
The following items are usually (partially or fully) deductible

















Comments

Allowances
The basic yearly allowance for an individual amounts to:
The basic yearly allowance for a couple amounts to:
Additional allowance for 1st child
Additional allowance for 2nd child
Additional allowance for 3rd child
Additional allowance for additional child
Additional allowance for old age dependents
Comments

Credits
The basic yearly credit for an individual amounts to:
The basic yearly credit for a couple amounts to:
Additional credit for 1st child
Additional credit for 2nd child
Additional credit for 3rd child
Additional credit for additional child
Additional credit for old age dependents
There are tax credits for:

















Comments

Losses
Losses can be
Carried-forward for Indefinite
 Years
Carried-back for Indefinite
 Years
Transferred to spouse or partner
Comments

Exemptions
The following income is exempted from income tax























Comments


Comments

Deductions:

From the amount of each category of income: all expenses incurred in obtaining such income are deductible.

From total income: all or part of certain costs that affect the capacity to pay tax such as social insurance contributions; contributions and gifts to religious institutions and developing countries, and medical and attendance expenses of disabled persons. For other costs (interest, medical expenses, life insurance, etc), a deduction of 19 % of the [gross] amount is allowed.

Tax credit for employed persons -  L. 23/12/2014, n. 190 (art. 1 par. 12 - 13 L. 190/2014)

This provision introduce a new version of paragraph 1 bis-  Article 13 of Consolidated Income Tax -  Decree of the President of the Republic on 22 December 1986, no. 917:

Par. 12

"1-bis. If tax gross income determined under Articles 49, with the exception of those listed in paragraph 2, letter a), and 50, paragraph 1, letters a), b), c), c-bis), d) , h-bis) e l), is greater than the amount of the deduction due pursuant to paragraph 1, taxpayers are entitled to a credit relating to the period of work in the year, which does not contribute to the income of an amount equal to:
 
1) EUR 960, if the total income does not exceed EUR 24,000;
  2) a part of EUR 960, if the total income exceeds EUR 24,000 euro but not more than EUR 26,000. The credit is calculated by this formula: 960 x ((26,000 – taxable income) / 2,000)"

par. 13

 For the purpose of determining the total income referred to Article 13, paragraph 1-bis of the Consolidated Law on Income Tax, in the Decree of the President of the Republic on 22 December 1986, no. 917, as amended by paragraph 12 of this Article shall not apply the provisions of Article 3, paragraph 1, of the law of 30 December 2010, n. 238, Article 17, paragraph 1 of the Decree-Law 29 November 2008, n. 185, converted with amendments, by the law of 28 January 2009 n. 2, and Article 44, paragraph 1 of the Decree-Law of 31 May 2010, n. 78, converted with amendments by Law 30 July 2010, n. 122, as amended by paragraph 14 of this Article.

 

Tax credits:

The 2007 budgetary law introduced a new system for the tax credits:

 

Tax credits for employed persons

Income Tax credits

Up to € 8,000.................................€ 1,880

From € 8,001 to € 28,000..............€ 978.00 increased by the product between euro 902.00 and the amount corresponding to the ratio between euro 28,000 and euro 20,000

From € 28,001 to euro 55,000........the deduction is due for the part corresponding to the ratio between the amount of € 55.000, reduced by the total income, and the amount of EUR 27,000

Over € 55,000................................€ 0

 

Tax credito

 

Tax credits for pension income

Income Tax credits

Up to € 7,500.................................€ 1,725

From € 7,501 to € 15,000..............€ 1,255 increased by product between euro 470.00 and the amount  corresponding to the ratio between the amount of € 15,000, reduced by the total income, and the amount of € 7,500

From € 15,001 but not to euro 55,000 the deduction is  equal to € 1,255 and is due for the amount corresponding to the ratio between the amount of € 55,000, reduced by the total income, and the amount of € 40,000

Over € 55,000................................€ 0

 

Tax credits for self-employed

Income Tax credits

Up to € 4,800.................................€ 1,104

From € 4,801 to € 55,000..............€ 1,104 is due for the amount corresponding to the ratio between the amount of € 55,000, reduced by the total income and the amount of 50,200

Over € 55,000................................€ 0

 

Tax credits for family dependants are:

 

-Spouse....................................€ 800 decreasing with income up to € 80,000 of annual income

-Children

  • ·Up to 3 years old(*).........€ 1,220 decreasing with income up to € 95,000 of annual income
  • ·Over 3 years old(*)...........€ 950 decreasing with income up to € 95,000 of annual income

-Other relatives.......................€ 750 decreasing with income up to € 80,000 of annual income

(*) For families with more than 3 children, the tax credit increases by € 200 for each child

 

Families with more than 3 children are entitled of a refundable tax credits of € 1,200.

For each disabled child the tax credit increases by € 400.

Each parent is entitled to 50 % of the tax credits.

 

Cash transfer for family dependants, varying with the family income, are:

 

Family income Tax credits for families with 1 child

Up to € 12,499...............................€ 1,650

Over € 12,500................................The amount of the tax credit decreases by € 9.3 every € 100 of increased income up to € 25,799; from € 25,800 the amount decreases by € 1.2 every € 100 of increased income up to € 61,000

 

Family income Tax credits for families with 2 children

Up to € 12,499...............................€ 3,100

Over € 12,500................................The amount of the tax credit decreases by € 13 every € 100 of increased income up to € 29,999; from € 30,000 the amount decreases by € 2.3 every € 100 of increased income up to € 66,500

 

Family income Tax credits for families with 3 children

Up to € 12,499...............................€ 4,500

Over € 12,500................................The amount of the tax credit decreases by € 11.5 every € 100 of increased income up to € 34,999; from € 35,000 the amount decreases by € 4.4 every € 100 of increased income up to € 78,700

 

Family income Additional cash transfer for families with 3 children and a soleparent

Up to € 14,499..............................€ 800

Over € 14,500................................The amount of the tax credit decreases by € 8.6 every € 100 of increased income

 

 

 
Rate(s) Structure
The following personal income tax rates apply to aggregate annual income (allowances not included)
Bracket 1 From   EUR/Natcur
To  15,000.00  EUR/Natcur
Rate: 23.00 %
Bracket 2 From  15,000.01  EUR/Natcur
To  28,000.00  EUR/Natcur
Rate: 27.00 %
Bracket 3 From  28,000.01  EUR/Natcur
To  55,000.00  EUR/Natcur
Rate: 38.00 %
Bracket 4 From  55,000.01  EUR/Natcur
To  75,000.00  EUR/Natcur
Rate: 41.00 %
Bracket 5 From  75,000.01  EUR/Natcur
To   EUR/Natcur
Rate: 43.00 %
Comments

For the period 2014 - 2016 is due a solidarity contribution of  3% on incomes in excess of € 300,000 (L. 12.27.2013 No. 147)


Regional taxes
Regional taxes are (rate in capital region) A lump-sum amount:
A percentage of income:
A tax surcharge: 1.73 %
Comments

This surcharge tax is in force since 1998/01/01

The basic rate is equal to 1.23% and it applies in a mandatory way in every Region which may increase or decrease:

- in Regions with ordinary statute, starting  from the year 2015, by 2.1 percentage points

- in Regions with special statute of 0.5 percentage points


Local/municipal taxes
Local taxes are (rate in capital city) A lump-sum amount:
A percentage of income:
A tax surcharge: 0.8 %
Comments

This surcharge tax is in force since 1999/01/01. The tax may be levied by each local government at a rate that cannot exceed 0.8 per cent. The municipality of Rome can increase it up to 0.9%.

Should municipalities choose to set a variety of rates with respect to this tax, they shall solely refer to the income brackets fixed for the purposes of Personal Income Tax (IRPEF), and they shall apply the same rate of progression. It is still in force that the exemption threshold – provided for by Article 1, paragraph 3-bis, of Legislative Decree no. 360 of 28 September 1998 – has been set only for the purposes of specific income requirements and shall be seen as an income limit below which the municipal surcharge to personal income tax is not due and, in case of limit exceedance, the mentioned surcharge applies to the global income.


Special surcharges
There are special surcharges in the form of:
Surcharge 1 : Name:
A lump-sum amount:
A percentage of income:
A tax surcharge:
Comments

Separate taxation
Separate taxation applies to the following items: Employment income
Income from business or self-employed activities
Income from sport and entertainment activities
Benefits in kind (company car, meal cheques, etc)
Pension income
Owner-occupied immovable property
Dividends
Interests from government bonds
Interests from corporate bonds
Interests from special saving accounts
Interests from deposits
Royalties
Income from renting immovable property
Income from renting movable property
Capital gains on immovable property
Capital gains on movable property
Inheritance
Annuities from life insurance
Prizes and awards
Scholarships
Income from occasional activities
Revenues from donations and gifts
Revenues from lotteries and games activities
Comments

The relevant rates can't be specified anyway, because of the indefiniteness of the variable suitable (and/or) necessary for determining them.


Withholding taxes
The tax is withheld when paid to residents on: Dividends:
Final Creditable
Interests from governments bonds:
Final Creditable
Interests from corporate bonds:
Final Creditable
Interests from special saving accounts:
Final Creditable
Interests from deposits:
Final Creditable
Comments


Comments
 
Tax due date

By deduction at source (except in respect of business income), the deduction constituting either payment on account or actual settlement of liability, or by means of direct payment not later than 16 June in each year at an approved bank, a post office or the appropriate tax‑collection office.

Where tax is above € 51.65, a provisional payment for the current year is also provided, at 99 % of the tax due, by the same date and using the same methods.

The provisional payment is to be made:

1. where the amount is below € 257.52, as a single payment in November;

2. where the amount is € 257.52 or more, in two instalments,

a) the first instalment, of 40 % of the provisional payment due (99 %), by 20 June;

b) the second instalment, of the balance of 60 %, in the November following.

 

From the tax year in progress at 31 December 2013, the extent of the advance tax on the income of individuals is fixed at 100 % (Article 11, paragraph 18, Decree-Law28.06.2013 no. 76)

 
Tax collector

 
Special features

Married couples:

Incomes are taxed separately, unless a joint return is filed.

 

Non‑residents:

Non‑resident persons are taxed on income arising in Italy.

The following are considered to have arisen in Italy:

  1. income from property;
  2. investment income transmitted by the State or by persons resident in Italy; exemption is provided for interest paid by banks and the post office on deposits and accounts;
  3. income from employment on Italian territory or employment abroad in the interests of the State or of a public body;
  4. income from self‑employment deriving from activities carried out on Italian territory;
  5. business income arising from activities carried out on Italian territory by permanent establishments;
  6. income from speculative or occasional activities, etc., carried out on Italian territory;
  7. capital gains from the sale of holdings in resident companies not trade in regulated markets;
  8. capital gains resulting from transfer of qualified stock on resident companies;
  9. income from partnerships credited to the non‑resident partner in accordance with his shares;
  10. pensions, allowances and life annuities;
  11. income from the use of patents, registered trade marks, intellectual property, study grants, regular payments that are not derived from capital or work, including the regular payments received by a spouse following a legal and effective separation, etc.

Additionally, upon the transfer abroad of the residence or registered office of a taxpayer engaged in commercial activities, the parts or the whole of the undertaking are charged to tax at their normal value.

Certain categories of income (some types of investment income and interest) are subject to irrecoverable withholding tax.

 

Losses:

Since 4th July 2006 losses arisen from professional activities are deductible from the same type of income in the same year and in the following five years.

Losses arisen from professional activities in the first three years are deductible to an unlimited extent.

 

Special features:

1. The taxpayer's total income also includes up to 50 % of incomes from the property of minor children subject to a legal usufruct on the part of the parents (the other 50 % is attributed to the other spouse, where there is one), and incomes fully available to the taxpayer, or which the taxpayer is entitled to administer without rendering accounts.

2. Income from property is normally assessed according to the cadastral system.

3. Tax credits are available in respect of:

- tax paid abroad;

- cash registers in the case of traders required to purchase such machines.

4. Separate taxation (Regime della tassazione separata):

The tax is applied separately to certain categories of income not comprising profits from business (capital gains resulting from the winding‑up or sale of businesses; arrears of emoluments; payments of seniority or social insurance allowances due on termination of activity as representative or consultant on a continuing basis, etc.).

In general, the tax is assessed at the rate applicable to half the taxpayer's total net income for the two years preceding that in which it becomes payable.

Residents and non-residents are given the possibility to opt for a substitutive tax regime providing for a rate of 15% (agreed rent) or a rate of 21% (free rent) to be applied to renting from premises intended for residential use, with the exception of renting from premises having a function within the enterprise, arts and professions.

For the years 2014 - 2017 The DL 47/2014 (Article 9, paragraph 1) has provided that rate of 15 percent expected for contracts negotiated rents  is reduced to 10 percent.

 

Reduction of taxable income in order to facilitate a return to Italy of workers, students and “brains”.

5. Substitutive taxation (Regime della tassazione sostitutiva):

For resident individuals, withholding tax is applied to the following items of income, in relation to which no further liability arises:

- interest, bonuses and other forms of yield from bonds and similar securities: various rates, up to a maximum of 27 %. In the case of interest owed by aliens, withholding tax is applied at the same rate.

- proceeds other than from securities; winnings from games of chance or skill, prizes from competitions, winnings from football pools and betting.

- for non resident: no taxation is applied on interest, bonuses and similar securities where a fair information exchange works between recipient residence State and the of source

6. Deduction at source (Regime della ritenuta di acconto):

This system, in fairly general use, is applied to the following items: income from employment and earnings ranking as such; income from self‑employment; and income from capital.

 
Economic function







Comments
 
Environmental taxes



Comments
 
Tax revenue
ESA95 code d51aa

Year
Annual tax revenue (millions)
Currency
Tax revenue as % of GDP
Tax revenue as % of total tax revenue
2012 178,422.00 EUR 11.05
2011 173,432.00 EUR 10.58
2010 173,796.00 EUR 10.82
2009 166,327.00 EUR 10.57
2008 171,147.00 EUR 10.48
2007 162,778.00 EUR 10.11
2006 150,963.00 EUR 9.74
2005 141,259.00 EUR 9.48
2004 136,696.00 EUR 9.43
2003 132,197.00 EUR 9.50
2002 128,068.00 EUR 9.51
2001 125,745.00 EUR 9.68
2000 118,340.00 EUR 9.54

Comments