Europe · Tax guide

Italy

Italy taxes company profits through IRES at 24% plus the regional production tax IRAP at 3.9%, charges VAT at 22%, has required e-invoicing through the SDI system for years, and offers a flat-rate regime for small sole traders. Taxes are administered by the Agenzia delle Entrate.

Updated 1 October 2026 · 9 of 12 figures checked against official sources

Check your obligations

At a glance

IRES (corporate tax)
24%

Plus IRAP

IRAP (regional tax)
3.9%

Standard rate; regions vary it

VAT (IVA)
22%

Reduced rates 10%, 5% and 4%

Flat-rate regime
15%

Sole traders with revenue up to €85,000

Withholding on dividends
26%

Before treaty or EU relief

Global minimum tax
15%

Groups with revenue of €750 million or more

IRES and IRAP

Companies pay IRES at 24% on taxable profit and IRAP at 3.9% on a broader base (roughly value added, with most labour costs now deductible); regions can vary the IRAP rate. Both are paid in advance instalments and settled with the annual return (Modello Redditi) by the end of October for calendar-year companies.

Sole traders and the flat-rate regime

Self-employed individuals with revenue up to €85,000 can choose the flat-rate regime (regime forfettario): a single substitute tax of 15% on a deemed profit, or 5% for qualifying start-ups in their first five years, with no VAT charged. Above the limit, ordinary income tax and VAT apply. Business clients withhold 20% from professionals' invoices.

VAT and e-invoicing

VAT is charged at 22%, with reduced rates of 10%, 5% and 4% for items such as tourism and some food, certain social services, and basic necessities. Returns are filed annually with quarterly communications, and VAT is paid monthly or quarterly.

Italy has required electronic invoicing through the Sistema di Interscambio (SDI) for almost all domestic B2B and B2C sales since 2019; invoices outside the SDI are not valid.

Withholding tax on payments abroad

  • Dividends and interest: 26%, reduced by treaties and EU directives.
  • Royalties paid to non-residents: 30% on 75% of the amount (22.5% effective), reducible by treaty.

Transfer pricing and the global minimum tax

Related-party transactions must be at arm's length; keeping Italian-format documentation protects against penalties. Groups with revenue of €750 million or more are subject to the global minimum tax at 15%.

Key dates

  • Monthly or quarterly, by the 16thVAT payments and withholding tax (F24)
  • June and NovemberIRES and IRAP balance and advance payments
  • End of OctoberAnnual income tax return (Modello Redditi) and IRAP return

Figures and sources

12 figures
  • Corporate income tax (IRES) rate24%
    TUIR (DPR 917/1986) · Art. 77
    Checked against the official source
  • Regional production tax (IRAP) standard rate3.9%
    D.Lgs. 446/1997 · Art. 16
    Checked against the official source
  • VAT (IVA) standard rate22%
    DPR 633/1972 · Art. 16
    Checked against the official source
  • VAT reduced rates10%, 5% and 4%
    DPR 633/1972 · Tabella A
    Checked against the official source
  • Substitute tax under the flat-rate regime15%
    Legge 190/2014 · Art. 1, c. 64
    Checked against the official source
  • Revenue ceiling for the flat-rate regime (regime forfettario)€85,000
    Legge 190/2014 · Art. 1, c. 54
    Checked against the official source
  • Withholding on dividends and interest paid abroad (before treaty or EU relief)26%
    DPR 600/1973 · Art. 27
    Under professional review
  • Global minimum tax rate15%
    D.Lgs. 209/2023 · D.Lgs. 209/2023
    Checked against the official source
  • Group revenue for the global minimum tax€750 million
    D.Lgs. 209/2023
    Under professional review
  • Substitute tax for qualifying start-ups in their first five years5%
    Legge 190/2014 · Art. 1, c. 65
    Checked against the official source
  • Withholding on invoices from Italian self-employed professionals (ritenuta d'acconto)20%
    DPR 600/1973 · Art. 25
    Checked against the official source
  • Withholding on royalties paid to non-residents30% on 75% of the amount (22.5% effective)
    DPR 600/1973 · Art. 25
    Under professional review

Indicative only. This assessment is a high-level overview of tax obligations in Italy based on the information you provided and rules in force for 2026. It is not tax or legal advice. Consult an Italian commercialista before making compliance decisions.