Italy

The Italian Budget Law for fiscal year (FY) 2026 introduced some changes regarding:

• New tax rates for personal income tax (PIT).
• A reduction of tax credit (neutralisation mechanism) deriving from certain expenses deduction for taxpayers with total income exceeding €200,000.
• Confirmation of rates for tax deductions and expense's thresholds linked to building renovation bonuses.
• Increase of flat tax for applicants and family members under the "Lump sum regime".
• Increase of deductible limit from gross taxable income of social security contribution paid to supplementary pension funds.
• A reduction of tax rate for "productivity bonus". The measure is valid for the years 2026 and 2027.
• Change in flat tax rate (Cedolare secca) on short term rentals.
• New tax exempt daily limit for electronic meal vouchers.
• New tax rate on capital gains and incomes deriving from crypto-currencies.

Furthermore, as per the current provisions of Legislative Decree no 209/2023 (inbound workers regime), there seem to be no restrictions to cumulate the inbound workers regime with the lump sum tax regime for new resident individuals. This interpretation has been confirmed by a recent answer to a tax ruling released by the Italian tax Authority on December 2025 which confirmed the possibility to simultaneously apply, for the individuals who meet the respective requirements, the above-mentioned special regimes during the same tax period.