Italy

Social security contributions

Social security contributions mainly depend on the type of employment or self-employment relationship, the sector of activity, the employee’s qualification, and the applicable social security fund.

Employment relationship

For employment relationships, social security contributions are generally due to both the employer and the employee.

The Italian employer must register with the Italian Social Security Administration, Istituto Nazionale Previdenza Sociale or INPS, and is responsible for withholding the employee’s social security contributions from salary and paying both the employer and employee contributions to INPS.

As a general indication, the overall social security burden for employment relationships may be around 40% of gross remuneration, with approximately 30% borne by the employer and approximately 10% borne by the employee.

The actual rates may vary depending on the employee’s category, industry sector, size of the employer, and other specific circumstances.

Employee mandatory social security contributions are generally deductible from the employee’s taxable income for IRPEF purposes.

Collaborators/directors relationship

Collaborators and directors generally must be enrolled in the mandatory social security regime with INPS, Gestione Separata INPS, unless an exemption applies.

The same social security regime discussed below for self-employed individuals without a VAT number generally applies.

Self-employment relationship

Self-employed individuals who are not VAT number holders and are not covered by a mandatory private pension fund must be registered with INPS under the separate social security regime, Gestione Separata INPS, instituted by Law no. 335/1995.

For FY 2026, the following rates apply to the separate social security regime:

For FY 2026, the income cap for Gestione Separata INPS purposes is EUR 122,295.

The minimum income threshold for contribution credit purposes is EUR 18,808.

For self-employed individuals without a VAT number, the contributions are generally borne by two-thirds by the company/client and one-third by the collaborator. The payment of the contribution is made entirely by the company/client.

For self-employed individuals with a VAT number who are not covered by a mandatory private pension fund, the contribution is fully borne by the individual and payments follow the same deadlines applicable to income taxes.

These individuals may charge an additional amount equal to 4% of the compensation to the customer/client on the invoice.

Consumption taxes

Value-added tax

Italian VAT, Imposta sul valore aggiunto, applies to supplies of goods and services carried out in Italy by entrepreneurs, professionals, or artists and to importations carried out by anyone.

Intra-community acquisitions are also subject to VAT in certain circumstances.

The standard VAT rate is 22%.

Reduced rates are provided for specifically listed supplies of goods and services, such as 4% and 10% rates for certain goods and services.

Intra-community supplies and exports are generally exempt from VAT.

Specific supplies of goods and services listed by law are exempt from VAT, including public postal services, hospital and medical care, education, insurance services, certain financial services, and certain supplies or leases of immovable property.

The filing deadline for VAT returns is 30 April of the following year.

Wealth tax on real estate properties owned outside Italy

The Italian wealth tax on real estate properties owned outside Italy, Imposta sul valore degli immobili situati all’estero or IVIE, applies to individuals who qualify as Italian tax residents.

The taxable base is generally the value of real estate, i.e. the purchase cost resulting from the purchase deed or the market value in force where the property is located.

For real estate owned in an EU member state or in an EEA country with an exchange of information agreement with Italy, the wealth tax is generally based on the cadastral value attributed to the property in the foreign country. Where no cadastral value exists, the tax is based on the purchase cost or market value.

From FY 2024, the applicable tax rate is 1.06%.

No IVIE is due if the tax is lower than EUR 200; otherwise, the entire IVIE amount is due.

If the real estate is subject to property tax in the foreign country, the individual may deduct that amount from the IVIE due in the Italian tax return.

The lump sum tax regime for new resident individuals substitutes the wealth tax on real estate owned outside Italy, provided the individual opted for it.

Wealth tax on financial investments owned outside Italy

The Italian wealth tax on financial investments owned outside Italy, Imposta sul valore delle attività finanziarie detenute all’estero or IVAFE, applies to individuals who qualify as Italian tax residents.

The taxable base is the value of the financial investments as of 31 December at the end of the holding period.

The applicable tax rate is 0.2%.

The IVAFE rate is increased to 0.4% if the financial assets are held in states or territories deemed to have privileged taxation, as identified by the relevant Ministerial Decree.

Switzerland is outside the scope of this increased rate from the 2024 tax period.

For bank accounts, IVAFE is generally due as a fixed amount of EUR 34.20 for each bank account. This amount is not due if the average annual balance of the bank account is lower than EUR 5,000.

The lump sum tax regime for new resident individuals substitutes the wealth tax on financial investments owned outside Italy, provided the individual opted for it.

Inheritance, estate, and gift taxes

Inheritance and gift taxes apply depending on the relationship between the deceased/donor and the beneficiary.

From 1 January 2025, inheritance/gift tax is due on a self-assessment basis by the taxpayer within 90 days from the filing of the inheritance tax return.

Inheritance/gift tax is also due to transfers deriving from trusts or other constraints.

Luxury and excise taxes

The following goods are subject to excise duties:

• energy products, such as petrol, gas, oil, natural gas, and coal;
• alcohol and alcoholic drinks;
• processed tobacco;
• electric power.

The tax liability arises depending on the type of goods, including importation, production, release for consumption, or own use.

Regional tax on productivity

The regional tax on productivity, IRAP, is generally applied at a flat rate of up to 3.9%.

With the Budget Law for FY 2022, IRAP for self-employed individuals and professionals has been abolished.

Stamp duty

Financial investments owned in Italy by an individual are subject to Italian stamp duty/wealth tax.

The taxable base is the value of the financial investments as of 31 December, and the applicable tax rate is generally 0.2%.

This tax is generally withheld directly by the bank.

Bank statements are also subject to fixed stamp duty, generally equal to EUR 34.20 if the client is an individual, and EUR 100 if the client is not an individual.

Property taxes on real estate owned in Italy

Real estate property tax, Imposta municipale propria or IMU, and garbage tax, TARI, may apply to real estate located in Italy.

The indivisible service tax, TASI, has been abolished.

The taxable base of IMU is generally determined by increasing the cadastral value by 5% and multiplying the result by a statutory coefficient, depending on the type of property.

The basic IMU rate for a principal abode is 0.5%, which may increase or decrease. The basic rate for other real estate is 0.86%, which may also increase or decrease.

Taxation of crypto-assets

The Budget Law for FY 2026 increased the tax rate from 26% to 33% on capital gains and income derived from crypto-assets.

The 26% rate remains unchanged for stable coins, i.e. e-money tokens denominated in euros.