IRPEF - Personal Income Tax 2026 — Italy

Lowest rate applies to first €28,000 of taxable income. Tax on this portion: €6,440. Simplified from previous 4-bracket system. Merged former 23% and 25% brackets.

Reduced from 35% to 33% in 2026 Budget Law as relief for middle-income earners. Maximum €22,000 in this bracket × 33% = €7,260. Saves €440 annually vs previous rate.

Top marginal rate on all income exceeding €50,000. No cap - applies to millions. On €50,000: total IRPEF = €13,700. Important: Above €200,000 income, special mechanism neutralizes 2026 rate reduction benefit.

2026 Budget introduced mechanism to eliminate tax benefit from 35%→33% rate reduction for taxpayers with total income exceeding €200,000. Technical adjustment ensures wealthy don't benefit from middle-income relief.

Each of Italy's 20 regions sets own rate within national framework. Wealthier regions (Lombardy, Lazio) typically charge higher rates ~3.33%. Poorer regions lower rates ~1.23%. Applied to same taxable income as IRPEF.

Withheld by employer in 11 monthly installments (January-November) following year after tax return settlement. Self-employed pay with tax return. Rate based on residence as of December 31.

Lombardy (Milan): 3.33%, Lazio (Rome): 3.33%, Veneto: 1.23-1.73%, Emilia-Romagna: 1.43-2.33%. Can add €700-€2,000 annual tax on €60,000 income depending on region.

Each municipality (comune) can apply up to 0.8% surcharge (0.9% for special cases like Rome). Many small towns charge 0-0.2%. Large cities often charge maximum 0.8%. Adds €0-€540 on €60,000 income.

Collected year after income earned: 30% advance in 9 installments (March-November), remaining 70% in settlement. New hires during year exempt from advance. Rate must be announced by municipalities by deadline.

Milan 0.8%, Rome 0.9% (special), Florence 0.5%, Naples 0.8%, Turin 0.8%, Bologna 0.8%. Small southern towns often 0%. Important factor when choosing where to live in Italy.