Working in Italy : Italian Income Tax

You can find the income tax rates for 2014 here, in relation to Italy. This guide also covers the income tax base for residents and non-residents, allowable tax credits and deductions, the special expatriate tax regime, capital income tax rates and information on double-taxation treaties.

Income Tax Base For Residents and Non-Residents of Italy

Residents of Italy
are subject to personal income tax on their total income, from all sources worldwide.
Non-residents of Belgium 
are subject to personal income tax on Italian sourced income only.
Individuals will be regarded as tax residents if:
  • Their main home or center of economic interests is in Italy.
  • They are registered within the civil registry for the vast majority of the tax year.

Income Tax Rates for 2014

Amount %age
Income tax is withheld at source: from 23% to 43%
From EUR 0 to 15,000 23%
From EUR 15,001 to 28,000 27%
From EUR 28,001 to 55,000

38%

From EUR 55,001 to 75,000 41%
Over 75,001 43%

Solidarity Surtax of 3% must be added to all income exceeding EUR 300,000.

Allowable Deductions and Tax Credits

Maintenance allowance; university expenses; medical expenses (if they are over 129 EUR); dependent elderly or disabled persons.

Special Expatriate Tax Regime

Expatriates who live in Italy will be classified as a Non-resident or a Resident . Non-residents are only taxed on income and gains that arise within Italian borders, while residents are taxed on worldwide income and gains. Expatriates will be classed as a tax payer if, for a period of 183 days, they have their principal place of residence or work in Italy, has their centre of vital interest within Italy or are registered with the registry office of the Population Registry (Anagrafe).

Capital Tax Rate

  • Inheritance tax is paid by heirs or legatees on the net amount inherited by each recipient from the estate of any deceased person who is considered to be a resident of Italy. The amount payable depends on the heir’s relationship to the deceased and ranges between 4% and 8%. In the financial sector, an extra 10% tax is imposed on bonuses and stock options when exceeding three times the employee's fixed salary.

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
See the list of the signed fiscal treaties, on the Ministry of Finance website. (in Italian).
Withholding Taxes Dividends:
Dividends: 27%; Interest: 12.5%/27%; Royalties: 15% if resident and 22.5%/30% if non-resident.
Bilateral Agreement
The United Kingdom and Belgium are bound by a double taxation treaty.

Filing Date

Taxpayers who derive taxable income in excess of certain limits must file an annual tax return between the 1st of May and the 31st of July of the year following the tax year (by 31 October if filing electronically).

Figures Based on Sources

Tax Authorities

Other Domestic Resources

Country Guides