The main income tax is levied on individuals as PIT (Personal Income Tax), known as IRPEF (Imposta Sui Redditi Delle Personne Fisiche). An individual is subject to National Income Tax, Regional Income Tax and Municipal Income Tax.
National income tax works in a progressive manner on all reported income.
Taxable income (EUR*) Tax on excess (%)
Over Not over
0 15,000 23
15,001 28,000 27
28,001 55,000 38
55,001 75,000 41
Tax status in regards to an individual is the starting point for applying the correct Italian taxation. In relation to the Italian tax law, both non-residents and Italian residents are subject to taxation in Italy, except on a different basis.
Italian Income Tax 2015: Individual Tax Resident
Individual tax residents are liable to the Italian Personal Income Tax amount on their income from anywhere it is produced, under the termed ‘worldwide principle’. This means tax residents are also a target for Italian taxation on foreign incomes, for example; deriving from real estate owned outside Italian borders or foreign dividends or other foreign income.
Alongside Personal Income Tax, there is a ‘wealth tax’ on real estate and on any financial investments from outside Italy itself.
Italian Income Tax 2015: Individuals Who Are Not Resident Individuals
Non-resident tax payers are also subject to Personal Income Tax – i.e employment income related to work activity undertaken within Italy. For this reason, foreign incomes are irrelevant in the taxation purposes within Italian borders.
Italian Income Tax 2015: Regional Income Tax
Regional Income Tax varies across Italian regions of residence. The regional income tax rates range between 1.23% and 2.03%.
Italian Income Tax 2015: Municipal Income Tax
Your Municipal Income Tax will depend on the residences municipality. The tax can range from anywhere between 0 and 0.8%. It is worth noting that municipalities can work with progressive tax rates applicable to the national income bracket.
Italian Income Tax 2015: Solidarity Contribution
Running up until December 2016, the Italian government employ a 3% solidarity contribution. This contribution applies to individuals declaring total yearly gross income higher than €300,000 – with the additional tax only applicable to the €300,000 ceiling. This extra contribution is deductible from the total taxable yearly income.