How much tax will you pay in Italy?
- See the data table below for detailed numbers
- Check the FAQ section for common expat questions
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Tax planning starts before you move. Understanding Italy's tax structure helps you budget accurately and avoid surprises.
Tax System Overview
| Tax Component | Rate / Details |
|---|---|
| Tax System Type | Progressive |
| Top Personal Income Tax Rate | 43% |
| Effective Rate on €90,000 | 27.6% |
| Net Monthly on €90,000 Gross | €4,827 |
| VAT (Standard Rate) | 22.0% |
| Special Expat Regime | Yes — unverified. Requires legal source verification |
| Tax Revenue (% of GDP) | 24.9% |
Income Tax in Italy
Italy operates a progressive income tax system, meaning higher earners pay a higher percentage on their income above certain thresholds. The top marginal rate is 43%.
What Does This Mean in Practice?
On a gross annual salary of €90,000, you would pay an effective tax rate of approximately 27.6%, resulting in a net monthly income of approximately €4,827. This accounts for income tax and mandatory social contributions.
For context, the average monthly salary in Italy is approximately €2,102.
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VAT (Value Added Tax)
The standard VAT rate in Italy is 22.0%. VAT is included in consumer prices and applies to most goods and services. Reduced rates typically apply to:
- Basic food items and groceries
- Medical supplies and pharmaceuticals
- Books and educational materials
- Public transport (in some cases)
Special Tax Regimes for Expats
Yes — unverified. Requires legal source verification
If eligible, these regimes can provide substantial savings during your initial years in Italy. Always verify current requirements with a qualified tax professional, as rules change frequently.
Tax Filing Requirements
As a tax resident of Italy, you are generally required to:
- Register with tax authorities upon establishing residence
- Obtain a tax identification number
- File an annual tax return (deadlines vary)
- Declare worldwide income if you are a tax resident
- Report foreign bank accounts if applicable
Double Taxation
Italy has double taxation agreements (DTAs) with numerous countries. These treaties determine which country has the right to tax specific types of income and help prevent you from being taxed twice on the same income. Before moving, check whether a DTA exists between Italy and your home country.
Tax Tips for Expats
- Hire a local tax adviser familiar with expat situations during your first year
- Keep records of all income, deductions, and tax payments from day one
- Understand residency rules: most countries consider you a tax resident after 183 days
- Check for exit tax: some countries impose tax on unrealised gains when you leave
- Social security contributions are often separate from income tax and can add 10-20% to your total burden
Additional Practical Information
The following information is compiled from expat community sources and recent reports to complement the official data above.
Key Institutions and Services
Based on current expat reports, the following organisations and services are relevant for newcomers to Italy:
- Italian Revenue Agency
Additional Data Points
Recent reports and expat sources provide these additional figures for Italy:
- All persons considered Italian tax residents are required by law to declare their income in Italy, regardless of its source. Tax residents in Italy are individuals who, for at least 183 days per year during the tax period, are registered in the population registers (anagrafe), or have established their domicile or residence in Italy within the meaning of the Italian civil code.
- There is also a regional tax of up to 3.33%, depending on your income bracket, set by each region. So it will be different, for example, in Florence, Milan or Rome, but also in the smallest cities in the surrounding area.
- Paying taxes in Italy also makes you eligible for tax deductions for expenses incurred personally or for the rest of the family. In addition, the Italian tax system allows taxpayers to benefit from a tax credit (detrazione) if they have incurred expenses during the tax year for which they are filing their tax returns, for example, medical expenses (which can be deducted up to an amount of 19%) or the interest on your home loan.
- However, if you are self-employed and are part of the flat-rate tax system, a different tax rate applies to your profile . In fact, according to Italian law, you will have to pay the equivalent of a 15% tax deducted at source from your income . In addition, from the first to the fifth year of activity, this amount does not exceed 5% in order to allow young entrepreneurs to get started.
- To benefit from this flat-rate regime and its advantages, you must respect certain precise criteria that are carefully monitored by the Italian tax authorities. For example, your income cannot exceed €65,000 per year, and you cannot earn more than €30,000 as an employee.
- As a self-employed expat in Italy, expect to pay between €600 and €2,500 per year for the services provided by a tax accountant: tax returns, payment reminders, tax payments, invoicing assistance, updates on current regulations, etc. The cost varies according to your status, the city of reference and your sector of activity. Do not hesitate to ask for a quote from several professionals before choosing.
- All persons considered Italian tax residents are required by law to declare their income in Italy, regardless of its source. Tax residents in Italy are individuals who, for at least 183 days per year during the tax period, are registered in the population registers (anagrafe), or have established their domicile or residence in Italy within the meaning of the Italian civil code.
- In general, to calculate income tax and to define the taxable base, the Italian tax system takes into account the following different types of income:
- Unlike some EU countries, Italian tax law requires that each member of the same family be taxed individually on each income they receive . Therefore, married couples have to fill in a tax return form for each partner, with the income from the property being divided into two equal parts under the community of property regime in the absence of any other tax treaty required by the spouses.
- It is important to keep a track-record of all your expenses. Indeed, under the Italian tax system, you can benefit from tax credits and deductions if your payment is traceable and you keep proof of it . Therefore, as far as possible, make bank transfers and keep your bank statements, receipts, or receipts if you decide to pay by credit card.
- To benefit from this flat-rate regime and its advantages, you must respect certain precise criteria that are carefully monitored by the Italian tax authorities. For example, your income cannot exceed €65,000 per year, and you cannot earn more than €30,000 as an employee.
Additional data sourced from expat community reports. All information should be verified with official sources.
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Get Your Free VerdictFrequently Asked Questions
What is the income tax rate in Italy?
Italy uses a progressive tax system. The top personal income tax rate is 43%. On a gross income of €90,000, the effective tax rate is approximately 27.6%, leaving a net monthly income of approximately €4,827.
Do I pay tax on worldwide income in Italy?
If you are a tax resident of Italy (usually 183+ days per year), you are generally taxed on worldwide income. Non-residents are only taxed on income sourced within Italy. Some special regimes may offer Territorial taxation taxation for the initial years.
How does Italy's tax compare to other countries?
With an effective rate of 27.6% on €90k income and a top rate of 43%, Italy's tax burden is Moderate by European standards. The tax revenue as a share of GDP is 24.9%. Compare with other countries using our assessment tool.
Do I need to file a tax return in Italy?
In most cases, yes. If you are employed in Italy, your employer may withhold taxes, but you may still need to file an annual return, especially if you have additional income, deductions to claim, or foreign income. Filing deadlines vary — consult the local tax authority.
Is freelance income taxed differently in Italy?
Freelancers in Italy are typically treated as self-employed and must pay both income tax and self-employed social security contributions. The progressive tax system applies. The effective rate on €90k is 27.6%. Quarterly estimated tax payments are usually required.