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Generic Tax Name IRAP - Regional tax on productive activities
Tax name in the national language Imposta Regionale sulle attività produttive - IRAP
Tax name in English Regional tax on productive activities
Member State IT-Italy
Tax in force since 1997/12/15
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

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

Social security contribution Employers
Legal base

D. Lgs.n 446 of 15 December 1997 (GU n° 298 of 23 December 1997, ordinary supplement 252/L); L n°244/2007.

Who sets
The tax rate is set by

The tax base is set by

The reliefs are set by


The base tax rate is fixed by State law. Regions may vary the general tax rate up to one percentage point. Regions may also introduce specific deductions and allowances.



Geographical Scope

IRAP is levied in all Italian regions.

IRAP is paid in the region where the production activity is located; if the activity is located in more than one region, IRAP is paid proportionally on the basis of the workers employed in each region.


Those engaged in commercial business (commercial entities, individuals deriving business income, companies and partnerships such as commercial company, general partnership, limited partnership, shipping company and de facto company), self‑employed workers engaged in arts, crafts and professions in partnership, agricultural producers receiving income from agriculture but with a turnover exceeding 7,000 euros (and also those whose turnover is below those limits but have not claimed the special arrangement for exemption from compliance with VAT), bodies and administrations of the State, the regions, provinces and municipalities, mountain communities, public and private entities other than companies and partnerships whose sole or main object is not the conduct of a commercial business and also companies, partnerships and entities of any kind, whether or not with separate legal identity, not resident in the Italian territory.

The tax is also payable by persons in voluntary liquidation or subject to insolvency proceedings (insolvency and compulsory liquidation) trading on a provisional basis.

Tax object and basis of assessment

The IRAP taxes the production activity, the exchange of goods and the supply of services.



IRAP is charged on the value of net production resulting from the business pursued within the region.

For commercial business and professionals, state administrations, regions, provinces, municipalities and generally for public administrations whose main object is not commercial business, the basis of assessment is the value of remunerations. For banks and insurance companies IRAP is charged on value of special schemes in consideration of the particular activity carried out.

Deductions, Allowances, Credits, Exemptions


The following are exempt from tax:

1.unit trusts (under Law n° 77 of 23 March 1983, Law n° 344 of 14 August 1993 and Law n° 86 of 25 January 1994);

2.pension funds (under Legislative Decree n° 124 of 21 April 1993);

3.EEIGs (European Economic Interest Groupings) under Legislative Decree n° 240 of 23 July 1991 (except as provided in Article 13 DL n° 446 of 15 December 1997).

4.small taxpayers under art. 1, paragraphs from 96 to 117, of Law no. 244/2007



Deductions are allowed for:

a) contributions for labour insurances;

b) expenses related to junior clerks, disabled persons and R&D;

c) € 1,850for each employee (maximum five) to enterprises with income below € 400,000;

d) € 15,000 for each employee in certain regions.

    - In particular, € 7,500 for each permanent employee in the tax period. This amount is increased to 13,500 for female employee and for under 35 years old employee;

     - € 15,000 for each permenent employee in the tax period in the following regions: Abruzzo, Basilicata, Calabria, Campania, Molise, Puglia, Sardegna and Sicilia. This amount is increased to € 21,000 for female employee and for under 35 years old employee.

A maximum deduction of € 8,000 € decreasing with income is allowed to companies with income below €180,759.91.

Starting from 2014 is expected, in the case of hiring new employees with a permanent contract, the deduction of costs incurred for such personnel within the maximum limit of 15,000 for each new employee. The deduction is due for the tax period of recruitment and for the next two years.

Starting from tax year 2015, businesses can deduct the difference between the total cost for employees with  open-ended contract and deductions aforesaid.(art. 1. par. 20 L. 190/2014).

Rate(s) Structure

The tax rate is generally set at 3.90 % for taxpayers but may be increased by up to one percentage point by individual regions, as from the third year following that in which the Legislative Decree comes into force.

Since 2008, rates increased by Regions must be multiplied by a coefficient of 0.9176.

Tax due date

Tax is due by tax periods, in each of which a separate tax liability is incurred. The tax period is determined in accordance with the parameters established for the purposes of income tax.

Tax collector

The tax due to each region is paid by the taxable person according to the same procedures and conditions as established for income tax.

Special features

IRAP is a regional tax; every taxpayer will submit a specific declaration to each region. Beginning from 2009 each region will approve its specific IRAP law. They can apply a different rate (1 point more or less) and specific deductions and allowances.

Economic function

Environmental taxes

Tax revenue
ESA95 code d29hg

Annual tax revenue (millions)
Tax revenue as % of GDP
Tax revenue as % of total tax revenue
2012 33,238.00 EUR 2.06
2011 32,940.00 EUR 2.01
2010 31,899.00 EUR 1.99
2009 31,644.00 EUR 2.01
2008 36,141.00 EUR 2.21
2007 39,399.00 EUR 2.45
2006 37,524.00 EUR 2.42
2005 34,690.00 EUR 2.33
2004 31,693.00 EUR 2.19
2003 32,307.00 EUR 2.32
2002 31,132.00 EUR 2.31
2001 30,571.00 EUR 2.35
2000 27,343.00 EUR 2.21