If you’ve moved to Italy and are planning to earn an income, no matter how small, you’ll need to pay taxes in Italy on your worldwide income and assets. Fortunately, there’re some great tax incentives for expats who’re about to move to Italy.

Through this article, we will help you navigate the Italian tax system by getting you up to speed about the income tax rates, available tax credits, and how to pay your taxes in Italy.

Do I need to pay taxes in Italy as an expat?

Yes, you’ve to pay taxes if you earn an income or own assets in Italy. Italian tax residents are taxed on the income from their activities in Italy and abroad, whereas non-resident taxpayers only need to pay tax on their Italian income.

What makes you a tax resident in Italy?

You’re considered a tax resident in Italy if you meet any of the following criteria for more than 183 days per year:

• You’re registered as an Italian resident in the Records of the Italian Resident Population (Anagrafe).
• You’ve got a residential address in Italy.
• You’ve got economic or social (e.g. family) interests in Italy.

You don’t have to be living in Italy to be considered a resident taxpayer. Simply having economic or social interests in Italy for more than 183 days makes you a resident taxpayer.

Does Italy tax citizens living abroad?

Italy taxes citizens living abroad if they’ve got an income source in Italy. In this case, you’ll be considered a non-resident taxpayer if you meet any of the following criteria:

• You’re registered with the Italian Anagrafe for less than 183 days in a calendar year.
• You don’t have any economic or social interest that extends beyond 183 days.

How long can I stay in Italy without paying taxes?

If you live in Italy for less than 183 days in a calendar year and you don’t earn any income in Italy, such as from pension, rent, interests, etc., you won’t need to pay tax in Italy.

Italy income tax

There’re 3 types of personal income taxes that you’ll have to pay in Italy regardless of tax resident status:

• National income tax
• Regional Income Tax
• Municipal Income Tax

National Income Tax in Italy

The National Income Tax (NIT) is calculated on the basis of a progressive tax rate that applies to both residents and non-residents.

Taxable Income	Income Tax Rate in Italy for 2024
0 – €28,000	23%
€28,001 – €55,000	35%
Above €55,001	43%

For example, if you earn €35,000 a year, you'll pay 23% for the first €28,000. On the remaining €7,000, you'll pay 35% tax.

Regional Income Tax in Italy

The regional income tax ranges from 1.23% to 3.33% depending on the region you’re reregistered in. It’s the same for resident and non-resident taxpayers.

Municipal Income Tax in Italy

The municipal income tax in Italy varies based on the municipality you’re registered in. The tax amounts range from 0% to 0.8% and are identical for both resident and non-resident taxpayers in Italy.

When to pay taxes in Italy

You'll need to file your tax return by 30 September of the following year if you're a resident tax payer in Italy. For example, if you want to file taxes for the financial year 2023, you would need to do it by 30th September 2024.

If you're self-employed, you'll need to make estimated payments throughout the year, with a final balancing payment due by 15 October of the following year.

For non-resident tax payers, the deadline is 15 October or by 30 November of the following year, if filing via registered post.

How do you file taxes in Italy?

Once you've applied for your Italian tax identification number, also known as Codice Fiscale, you can file your taxes online.

Are you a non-resident or need a Codice Fiscale before your arrival? You can request one at the local Italian embassy.

Filing tax in Italy when you’re employed

If you're employed in Italy, your employer will deduct taxes and social security contributions from your salary each month and pay them directly to the relevant authorities.

All you need to do is file your tax return with the Modello 730. Retirees can also use this form and spouses can submit this form jointly.

Luckily, filing taxes in Italy is easy as the form is pre-filled by the Agenzia delle Entrate, including any deductions you're eligible for. You can access the pre-completed form by logging in via SPID, CIE, or CNS. After that, follow the steps online to view, edit, or submit the tax return.

Don’t forget that you need to file taxes even if you’ve not earned any income as Italy has no tax-free amounts.

How to file a tax return as self-employed in Italy

As a self-employed taxpayer, you’ll have to file the Modello Redditi PF form by the October 15 of the year following the tax year.

To file your taxes, you’ll need to have both a Codice Fiscale and a VAT number for your company.

Here’re the steps to paying tax as a freelancer in Italy:

1. File a tax return using the Modello Redditi PF form (in particular the LM box)
2. Submit the Summary Reliability Indices (ISA) form, if necessary
3. Submit an IRAP (trade income) tax return,
4. Fulfil any VAT obligations.

Is there a way to reduce your personal income tax liabilities in Italy?

The Italian government offers various types of concessions on tax. Some of the most common tax deductions are:

• Expenses on dependents
• Rental payments
• Medical expenses
• Education expenses

Personal income tax credit based on dependents

To take advantage of tax breaks for having dependents, there're some requirements. You'll need to be based in Italy and pay tax for at least 2 years, with an employment contract lasting at least another 6 months. You'll also need to have Italian or European citizenship or residence.

In 2024, the maximum annual tax credit for dependents in Italy are: €800 for spouse, €750 for other dependents or €950 for children over the age of 21.

There's a monthly allowance available for parents with children below the age of 21 provided the child is:

• Enrolled in a school or professional training course
• Doing an internship or work activity with a total annual income of less than €8,000
• Registered as an unemployed job seeker with public employment services
• Enrolled in universal civil service

The amount received for the allowance depends on how many children you’ve below the age of 21, and your financial status. The amount you may receive will be:

Number of Children	Range of the allowance
1	€54.10 - €189.20
2	€108.20 - €378.40
3	€178.50 - €659.50
4+	€398.80 - €1,090.60

There're some additional allowances given to young parents and parents of disabled children.

Personal income tax deductions for rental fees

You might be able to get a tax credit on your rental fees depending on your age, income level and employment status. The amount you receive will depend on the rent you pay.

The maximum tax credits for rental fees are outlined below;

Type of Tenant	Maximum tax credit per year
Annual income less than €15,493.71	€300
Annual income is between €15,493.71 and €30,987.41	€150
Young tenants (20-30 years-old) with annual income less than €15,493.71 ^	20% of the rental cost, not exceeding €2,000
Seconded workers ^^ with annual income less than €15,493.71	€991.60
Seconded workers ^^ with annual income between €15,493.71 and €30,987.41	€495.80

^ This is only applicable for the first 4 years of the rental contract.

^^ A seconded worker is someone who is coming back to Italy under new employment conditions that is substantially different from their current employment.

Tax deduction for medical expenses in Italy

The tax credit for medical expenses is 19% of the amount you’ve paid above €129.11 throughout the fiscal year. You'll need to provide receipts for these expenses.

Tax deduction for education expenses in Italy

You can request tax credits for any expenses charged by educational institutions.

Level of Education	Annual amount
Public university fees	Full tuition fees
Nursery, elementary, secondary and high school fees	19% of the fees, up to €800 per child
School registration fees for children up to 3 years old	19% of the fees, up to €632

Tax breaks for new tax residents in Italy

One of the tax breaks for residents in Italy includes the temporary tax relief scheme for new or returning workers in Italy.

Employed and self-employed workers moving to Italy during the 2024 tax year and earning less than €600,000 a year will be taxed on 50% of their income. Those with a minor child will be taxed on 40% of their income. This temporary tax relief applies from the tax year the residence was moved to Italy and the next 4 subsequent tax years.

Conditions required to meet this __temporary tax benefit include:

• You must live in Italy as a tax resident for at least 4 years
• You were not a tax resident in Italy during the last 3 tax periods
• You work is carried out in Italy for the most part
• You have a high qualification or specialisation

There's also a tax benefit for new residents moving to Italy. This is specifically geared towards high-net individuals who have not been a tax resident in Italy for the last 9 years before moving to Italy.

Does Italy have dual tax arrangements?

Since Italian tax residents are taxed on their worldwide income, it’s certainly handy that Italy has dual tax arrangements with most of the countries in the world. This way, you won’t be double taxed.

Here’re the countries that have such an agreement with Italy:

Important tax terms in Italian

Italy’s tax system uses many Italian terms. This is not very expat-friendly as you may not be fluent in Italian. So here’re the most important Italian tax related terms and their meaning:

• Codice Fiscale: Your Tax Identification Number(TIN), mandatory for everyone residing in Italy for more than 90 days a year.
• Imposta sui Redditi delle Persone Fisiche (IRPEF): Individual Income Tax.
• Modello 730: Simplified income tax return form used by resident taxpayers who’re employed, retired or spouses of employed individuals.
• Modello Redditi PF: Income tax return form for non-resident taxpayers and self-employed individuals.
• Indici sintetici di affidabilità (ISA): Summary Reliability Indices, a form used by individuals who undertake any type of business in Italy and need to declare income from more than one taxation period.
• IRAP: Regional production tax that’s charged on the activities realized within a regional territory. Although it depends on the business activity, the most common rate is 3.9%.