Italy Taxation: A Detailed Guideline to Italian Tax System

Italy’s tax system plays a pivotal role in both its economy and in the lives of its residents, whether they are individuals or businesses. As a country with a rich history and a vibrant economic landscape, Italy attracts many new residents each year, drawn by its unique lifestyle and business opportunities. However, navigating the Italian tax system is essential for anyone considering a move or already living in Italy. Understanding the complexity of this system can help optimize your financial planning and ensure compliance with local regulations.

The Italian tax system is structured to collect revenue efficiently while offering various incentives to stimulate economic growth and attract foreign talent. The government places a significant emphasis on tax revenue, which accounts for nearly one-third of the nation’s GDP—a higher proportion compared to many other European Union countries. This substantial contribution underscores the importance of taxes in maintaining and developing Italy’s public services and infrastructure.

Tax Obligations in Italy

A fundamental concept in the Italian tax system is tax residency. Identifying whether you qualify as a tax resident is crucial because it dictates the extent of your tax liabilities. As a tax resident in Italy, you are required to pay income tax on your worldwide earnings, not just the income generated within Italy. This global taxation principle aligns with the practices of many developed countries and ensures that all income is subject to Italian tax laws.

Primary Tax Categories in Italy

The Italian tax system comprises various categories, each designed to address different sources of income and types of transactions. Below are the primary tax categories that individuals and businesses should be aware of:

1. Income Tax (IRPEF): This tax is levied on individual income, including wages, salaries, and business income. The rates are progressive, meaning they increase as the income level rises.
   
2. Corporate Tax (IRES): Applied to the profits of companies and other corporate entities, this tax has a standard rate that businesses need to account for in their financial planning.
   
3. Value-Added Tax (VAT): A consumption tax applied to most goods and services, VAT is an essential part of business operations, affecting pricing and cost structures.
   
4. Regional and Municipal Taxes: Additional taxes may be imposed by regional and local authorities, impacting both individuals and businesses depending on their location.

Individual Taxation in Italy

Individuals earning income or conducting business activities in Italy, including self-employed professionals, must comply with the country’s tax filing requirements. The taxable base for these obligations is calculated after accounting for social security contributions and applicable tax deductions, ensuring a fair assessment of net income.

Tax Residency in Italy

Before delving into specific taxes, it is crucial to understand who qualifies as a tax resident in Italy. As a tax resident, you are obligated to pay income tax on your worldwide earnings. You qualify as a tax resident in Italy if you meet any of the following criteria for at least 183 days within a calendar year:

1. Registration with the Registry of the Italian Resident Population: This includes foreign nationals who must deregister upon planning to leave Italy.
   
2. Center of Personal or Professional Interests: Italy is considered the hub of your personal or professional life, which could include maintaining family ties, owning real estate, holding bank accounts, or having financial investments in Italy.
   
3. Primary Residence: Your main residence is in Italy, and you intend to live there on a long-term basis.

Taxation for Non-Residents

Non-resident individuals in Italy are taxed solely on income derived from Italian sources. This includes salaries earned from employment in Italy, revenue from Italian investments, and any other income generated within the country. Additionally, non-residents who own property in Italy may be subject to property taxes. The focus on local income ensures that non-residents contribute to the Italian tax system in proportion to their economic activities within the country.

Corporate Taxation in Italy

A company is considered a tax resident in Italy and is subject to taxation on its worldwide income if it meets any of the following criteria:

1. Location of Headquarters: The company’s legal or administrative headquarters are situated in Italy.
   
2. Principal Business Operations: The main business activities occur within Italy.
   
3. Ownership by Italian Residents: The company is directly or indirectly owned by Italian tax residents.
   
4. Composition of the Board of Directors: The majority of the board of directors consists of Italian residents.

Taxation for Non-Resident Companies

Non-resident companies are subject to corporate income tax and regional production tax only on income that is sourced from Italy. This includes profits from business activities conducted within Italy, ensuring that non-resident entities contribute to the Italian tax system in relation to their economic presence in the country.

Tax Calendar and Residency Implications

Italy’s tax year aligns with the calendar year, running from January 1 to December 31. Unlike the UK, Italy does not have a concept of a split tax year, meaning an individual is regarded as a tax resident for the entire year.

While being an Italian tax resident entails more responsibilities, it also offers the benefit of living, working, and studying in Italy, along with visa-free travel across Europe. Affluent individuals can expedite their residency through the Italy Golden Visa, also known as the Investor Visa.

Personal Income Tax

Residents and non-residents earning income in Italy are subject to the federal personal income tax (IRPEF). This tax applies to various types of income, including capital income, employment income, self-employment income, business activities, and income from land. Permanent residents pay tax on both domestic and international earnings, whereas non-residents are taxed solely on income generated within Italy.

IRPEF is a progressive tax, meaning the rate increases with the amount of income earned. The tax rates for 2023 are as follows:

• Up to €15,000: 23%
• €15,001 to €28,000: 25%
• €28,001 to €50,000: 35%
• Over €50,000: 43%

Regional and Municipal Income Taxes

Besides the federal income tax, residents in Italy also pay regional income tax, ranging from 1.23% to 3.33%, and a municipal tax that can be as high as 0.9%. The exact rates are determined by each region and municipality, with wealthier areas typically imposing higher rates.

Payment and Deductions

Income tax can be paid in two installments if the total exceeds €257.52. The first installment, constituting 40% of the total, is due by June 30, while the remaining 60% is payable by November 30.

Several expenses are deductible, reducing the taxable income. These include:

• Medical expenses
• Education and childcare costs
• Mortgage interest payments
• Charitable donations
• Property renovations
• Energy-saving improvements

Special Tax Regime for High-Net-Worth Individuals

High-net-worth individuals can opt for the Special Tax Regime, allowing new residents to pay a flat rate of €100,000 annually on foreign-source income, irrespective of the amount. This benefit extends to family members, who pay a flat rate of €25,000 annually on their foreign income. Eligibility requires non-residency in Italy for the past nine years, and the regime lasts for 15 years from the start of tax residency. Many individuals under this regime acquire an Italian residence permit through investment.

Social Security Contributions

Employees typically contribute around 10% of their salary to the Italian National Institute for Social Security. Self-employed individuals face higher rates, with those under a mandatory pension fund contributing at 24%, and those with a VAT number under a separate social security regime contributing approximately 26%.

Capital Gains Tax

Capital gains tax applies when assets such as property, vehicles, jewelry, stocks, and bonds are sold at a profit. The standard rate is 26%. However, real estate owned for over five years or acquired through inheritance is generally exempt.

Taxation on Dividends, Interest, and Cryptocurrency

Profits from dividends, interest, and cryptocurrency exceeding €2,000 are taxed at 26%. The tax rate for Italian government bonds is lower at 12.5%. If a taxpayer owns more than 50% of a company’s shares and is an officer in that company, the tax on dividends approaches 50%. Conversely, the tax on interest from government securities remains at 12.5%.

Inheritance and Gift Tax in Italy

Italy boasts one of the lowest inheritance and gift tax rates in Europe, ranging from 4% to 8% depending on the relationship between the donor and recipient:

1. Direct Line Heirs: Spouses, children, parents, and sometimes grandchildren pay a 4% tax on amounts over €1 million.
   
   
2. Siblings: A 6% tax is imposed on amounts exceeding €100,000.
   
   
3. Extended Family (up to fourth generation): A 6% tax applies to the entire value of the inheritance or gift.
   
   
4. Non-Relatives: An 8% tax is charged on the total amount.

Additionally, inherited real estate incurs an extra 3% tax, comprising a 2% mortgage tax and a 1% cadastral tax on the property’s value. Non-residents are only taxed on assets located within Italy.

Certain assets are exempt from inheritance and gift tax under Italian law, including whole-life policies, government bonds and shares, and equity in family businesses.

Inheritance and Gift Tax Rates

• Spouses, children, parents: 4%, with a €1 million exemption per heir.
• Siblings: 6%, with a €100,000 exemption per heir.
• Relatives up to the fourth generation: 6%, with no exemption.
• Fifth-degree relatives and non-relatives: 8%, with no exemption.

Vehicle Tax

Vehicle tax is an annual charge on all registered motor vehicles in Italy, regardless of usage. This tax also applies to long-term rentals, leases, and installment-purchased vehicles. The rate depends on the engine horsepower, the vehicle’s EU emission grade (Euro 0-6), and the region of registration. Vehicles with Euro 4, 5, and 6 grades incur the lowest tax rates.

Regional governments set specific tax rates. For example:

• Rome: €2.80 per horsepower, resulting in a €504 annual tax for a 180-horsepower car.
  
• Naples: €2.90 per horsepower, making the same car’s annual tax €522.
  
• Milan: €2.58 per horsepower, leading to a €464.40 annual tax for a 180-horsepower car.
  
• Florence: €2.70 per horsepower, resulting in a €486 annual tax for a 180-horsepower car.
  
• Turin: €2.65 per horsepower, resulting in a €477 annual tax for a 180-horsepower car.
  
• Palermo: €2.85 per horsepower, resulting in a €513 annual tax for a 180-horsepower car.

This website can calculate the exact tax based on the car’s license plate number and region of residence.

Tax Reductions and Exemptions

Certain vehicles qualify for tax reductions or exemptions:

• Historic vehicles over 30 years old.
• Vehicles for disabled drivers.
• Electric vehicles, LPG vehicles, natural gas vehicles, and hybrids.
• Vehicles are delivered to a dealership for resale.

Wealth Tax

Italy imposes a wealth tax on properties and financial investments owned by residents abroad. The tax rate for real estate is 0.76% of the cadastral value. This tax does not apply to properties used as the main residence or marital homes assigned to a spouse. The tax is waived if the total amount is below €200.

Foreign financial assets are taxed at 0.2% of their value, provided the average annual value exceeds €5,000. If it does not, the tax is not applied.

Individual Tax Rates in Italy for 2023

• Personal Income Tax: 23-43%, depending on total income.
  
• Social Security Contributions: 10% for employees, 24% for self-employed individuals.
  
• Capital Gains Tax: Fixed at 26%.
  
• Inheritance and Gift Tax: 4-8%, based on the degree of family relationship.
  
• Vehicle Tax: €2-4 per kW, influenced by region, engine horsepower, and emission grade.

Corporate Tax Rates in Italy

Business Income Tax

Italian corporations must pay corporate income tax (IRES) and regional production tax (IRAP) on their global profits. Non-resident companies are taxed only on income from Italian sources.

• Corporate Income Tax (IRES): Standard rate is 24%.
  
• Regional Production Tax (IRAP): Standard rate is 3.9%, with regional authorities allowed to adjust rates within a 0.92% range.

Special rates apply to certain sectors:

• Banks and Financial Institutions: 4.65%
  
• Insurance Companies: 5.9%

Certain deductions can offset taxable income, including depreciation, interest payments, and charitable donations.

Tax Exemptions and Incentives

• Special Economic Zones: Companies in any of the eight Italian special economic zones, like Campania, Calabria, or Abruzzo, benefit from tax exemptions and lower rates.
  
• Intellectual Property Investments: Companies engaged in intellectual property investments may receive tax benefits.

Corporate Capital Gains

Capital gains are subject to the 24% corporate income tax. However, under the participation exemption regime (PEX), 95% of capital gains from shareholdings can be exempt from IRES.

Research and Development Tax Credit

Companies investing at least €30,000 annually in R&D activities can claim a tax credit, reducing income tax, regional production tax, or social security contributions. The maximum annual credit is €20 million.

Special Taxation Regimes for Self-Employed and Freelancers

Self-employed individuals and individual entrepreneurs are subject to the progressive income tax (IRPEF), with rates from 23% to 43% on income over €50,000.

Regime Forfettario

This regime allows new self-employed individuals or freelancers to replace income tax and IRAP with a flat 15% tax, provided their income is below €85,000 annually and total expenses for employees and collaborators do not exceed €20,000.

• Reduced Rate for New Businesses: 5% for the first five years if the individual has not been involved in any business activity in the previous three years.

Value Added Tax (VAT)

Businesses in Italy must charge VAT (IVA) on products and services. The standard VAT rate is 22%, just 1% above the EU average. Different categories have reduced rates:

• 10% Rate: Applies to restaurant food, wines, olive oil, water supplies, public transportation, real estate maintenance, hotel accommodation, theatrical performances, and concerts.
  
• 5% Rate: Applies to some social services, passenger transport, and certain herbs.
  
• 4% Rate: Applies to basic food and agricultural products, books, newspapers, medical devices, and wheelchairs.
  
• 0% Rate: Applies to international transport services, intra-community and international trade, education, health, insurance, and real estate transactions.

VAT Exemptions

Small businesses with an annual gross income up to €85,000 and total expenses up to €20,000 for employee work and collaborator payments from the previous year are exempt from VAT obligations.

VAT Filing

Most businesses file VAT returns by the 16th of the following month. However, businesses with annual turnovers below €400,000 (for self-employed and service businesses) or €700,000 (for other activities) can opt for quarterly payments, with a 1% interest added to the VAT due.

Social Security Contributions

For Italian companies, social security contributions are set at 30% of employees’ gross compensation.

Summary of Corporate Taxes in Italy

• Corporate Income Tax (IRES): 24%
• Regional Production Tax (IRAP): 3.9%
• VAT (IVA): 22%
• Social Security Contributions: 30%

Property Taxes in Italy

Tax residence status in Italy does not influence the tax obligations on real estate. Both non-residents and Italian nationals are subject to the same property tax rates.

Taxes Applied When Buying Real Estate

When purchasing real estate in Italy, several taxes must be paid. Tthe rates for these taxes depend on whether the property is bought from a company or an individual and whether it is a primary residence or a second home.

• Registration Tax: This can be 2% or 9% of the cadastral value, but it must be at least €1,000. For a primary residence, where the buyer resides more than six months a year, the rate is 2%. For a second home, the rate increases to 9%.
  
• Mortgage Tax: Fixed at €50 when buying from a private seller and €200 when buying from a registered company.
  
• Cadastral Tax: Similar to the mortgage tax, it is €50 when purchasing from a private seller and €200 from a registered company.
  
• VAT: Applied if the seller is a registered company and can be in two scenarios:
  
  1. Purchase from a construction company within five years of completion.
     
  2. Purchase of a residential property classified as social housing.

For primary residences bought from a registered seller, the VAT rate is 4%. For second homes, the rate is 10%, and for luxury properties, it is 22%.

Capital Gains Tax on Selling Real Estate

If real estate is sold at a profit, a capital gains tax of 26% may be applicable. However, this tax is not charged if the property has been owned for more than five years or if it was received through inheritance or as a gift.

Regular Property Taxes

Owners of real estate in Italy are required to pay several ongoing taxes:

• IMU (Municipal Property Tax): Applies to all property uses, including business activities. The rate varies from 0.46% to 1.06%, depending on the municipality. The standard rate of IMU is 0.76%.
  
• TASI (Tax for Indivisible Services): Covers local municipality services.
  
• TARI (Waste Collection Tax): Covers waste collection services.

Calculating IMU

To calculate the IMU tax, you must adjust the cadastral value by increasing it by 5% and then multiplying it by a coefficient based on the property type. The IMU rate is then applied to this adjusted value.

Coefficients for IMU Calculation

You can calculate the specific IMU rate for your property using this website.

Payment Schedule and Exemptions

The payment schedule and exemptions for property tax is essential for homeowners in Italy. Property tax (IMU) is paid in two installments, due on June 16 and December 16 each financial year. IMU is not applicable to properties that serve as the taxpayer’s main residence, provided these are not classified as luxury homes.

TASI (Tax for Indivisible Services)

TASI, a tax for indivisible services, is another key component of property-related taxes in Italy. The TASI rate ranges from 0.1% to 0.25%, depending on the municipality. This tax is paid in two parts, alongside IMU payments. The combined rate of IMU and TASI cannot exceed 1.06%, which is the maximum IMU rate.

TARI (Waste Collection Tax)

TARI is a tax specifically designed to cover the costs associated with waste collection and disposal. 

TARI is an annual tax based on the property’s size and the number of occupants. The average cost is around €325 for a family of four living in an 80 m² house. Between 2018 and 2022, TARI rates increased by 7.7%.

Import and Export Taxes in Italy

Import Duty

Import duty applies to items valued at €150 or more when imported from non-EU countries. The rates range from 0% to 17%, with an average rate of 4.2%. VAT is also levied on products valued above €22. Small goods below these thresholds are exempt from duties and taxes.

The VAT rate varies depending on the product type; for instance, cameras are taxed at 4.2%, while health and beauty products are taxed at 65%.

Export Taxes

Generally, export taxes are not imposed on goods leaving Italy.

Tax Reliefs in Italy

Italy offers a range of tax reliefs designed to incentivize specific activities and investments, providing significant financial benefits to both individuals and businesses. These reliefs aim to promote sustainable practices, improve living conditions, and support first-time homebuyers. Below is an overview of the key tax relief programs available in Italy.

Superbonus

The Superbonus offers up to 110% tax reduction on building renovations aimed at enhancing energy efficiency and earthquake protection. Eligible upgrades include insulation, efficient window frames, heating and air conditioning system replacements, and renewable energy installations.

Renovation Bonus

A 50% tax deduction is available for residential building renovations, with a maximum spending limit of €96,000 per property. Eligible works include extraordinary maintenance, restoration, and building renovations.

Water Saving Bonus

A €1,000 bonus is provided for installing water-saving plumbing in new or existing buildings. This bonus can be claimed only once per property.

Drinking Water Bonus

A 50% tax credit is offered for systems that improve drinking water quality, such as filtration or mineralization systems, to reduce plastic container usage. The maximum expense eligible for the credit is €1,000 for individuals and €5,000 for businesses.

First Home Purchase Subsidies

First-time homebuyers or those selling their current property within 12 months of purchasing a new one can benefit from reduced registration tax of 2% (instead of 9%), with mortgage and cadastral taxes fixed at €50 each.

Tax Avoidance in Italy

According to the European Commission, Italy loses over €99 billion annually to tax evasion, the highest among EU countries, with nearly one-third attributed to unpaid VAT. This is partly due to the high prevalence of cash transactions, exceeding 80%.

To combat tax evasion, Italy imposes severe penalties for inaccurate, incomplete, or fraudulent tax filings:

• Failure to file a tax return: 120-140% of the taxes due.
• Underreporting taxable income: 90-180% of the taxes due.
• Unpaid or late-paid tax: 30% penalty; within 15 days of delay, the penalty is 1% per day, increasing to 15% for delays between 15 and 90 days.

More severe cases involving fictitious invoices, false tax returns, or concealing/destroying accounting documents can lead to higher fines and imprisonment.

Taxes in Italy for Foreigners

Italy’s tax system includes specific regulations and opportunities for foreigners, whether they are tourists, new residents, or business owners. Understanding these taxes is crucial for anyone planning to visit or relocate to Italy, as well as for those conducting business within the country. The following sections provide an overview of the key taxes and tax reliefs applicable to foreigners in Italy.

Tourist Tax

In most Italian cities, tourists are required to pay a tax for staying in hotels, bed and breakfasts, or holiday rentals. The tax rate varies based on the city’s popularity, the duration of the stay, and the type of accommodation. Each municipality sets its own rates. For example:

• Rome: The tourist tax ranges from €3 to €10 per day, depending on the type of accommodation and the location within the city.
• Milan: The rates range from €2 to €5 per day. This applies to different categories of accommodation, including hotels and non-hotel facilities such as holiday homes and bed & breakfasts.
• Florence: Visitors can expect to pay between €1 and €5 per day, with the rate varying based on the accommodation’s star rating and the duration of the stay.
• Venice: The tax can go up to €10 per day during peak periods such as the carnival, while regular rates are generally around €6 per day.
• Naples: The tourist tax ranges from €2 to €5 per day, again varying by the type of accommodation and its star rating.
• Turin: The tax ranges from €2.30 to €5 per day, with a flat rate of €2.30 for non-hotel establishments.

VAT Refund for Non-EU Nationals

Non-EU nationals can receive a VAT refund for purchases of at least €175 in a single store. The refund can be claimed at the airport before departure by presenting an official form, the purchase receipt, the items bought, and return tickets.

Taxation for Non-Residents

Non-residents earning income in Italy can potentially reduce their tax burden through Double Taxation Agreements (DTA) between Italy and their home country. These agreements may allow them to pay taxes in just one country or at reduced rates in both countries. The full list of countries with DTAs with Italy is available on the Ministry of Economy and Finance of Italy’s website. Without a DTA, taxes must be paid in both Italy and the individual’s country of residence.

Taxation for New Residents

New residents in Italy are taxed on their global income, including profits from foreign real estate, interests, dividends, and capital gains. Those who have not been tax residents in Italy for 9 out of the last 10 years can opt for the Special Tax Regime, paying a flat rate of €100,000 annually on all non-Italian-sourced income for up to 15 years.

Special Tax Regimes for Foreign Workers and Retirees

• Lavoratori Impatriati: Foreign workers not tax residents in Italy for the past 2 years can pay only 30% of their income tax (10% if residing in southern Italy). This regime is valid for 5 years and can be extended for another 5 years. Requirements include committing to Italian tax residency for 2 years, holding a university degree, and spending about 85% of their work time in Italy.
  
• Retirees: A flat tax rate of 7% on foreign passive income is available for retirees moving to municipalities with 20,000 or fewer inhabitants in specific areas. This regime is valid for up to 10 years.

Taxation for Business Owners

Business owners with a residence permit through the Investor Visa for Italy program do not need to stay in Italy for 183 days per year. They can remain tax residents of their home country but must pay taxes on income from their Italian business.

Moving to Italy and Becoming a Tax Resident

Italy Golden Visa

Wealthy individuals can quickly become legal residents in Italy by applying for the Italy Golden Visa (Investor Visa). This visa allows third-country nationals to obtain an Italian residence permit within three months by investing in the country’s economy. There are four investment options:

1. Invest €250,000 or more in an innovative startup approved by Italian authorities.
2. Invest €500,000 or more in an Italian company.
3. Invest €1,000,000 or more in socially essential projects.
4. Purchase government bonds worth at least €2,000,000.

The residence permit issued under the Golden Visa program is valid for 2 years and can be extended for 3 years if the investment is maintained. Investors can include their family members (spouse, children, and parents) in the application.

Benefits and Path to Citizenship

Italian residents enjoy visa-free travel within Schengen countries, can enroll their children in Italian universities, and enter Italy even when borders are closed to foreigners. After 5 years of residency, investors can apply for permanent residence. After an additional 5 years, they become eligible for Italian citizenship by naturalization, provided they pass a language test and maintain a clean criminal record.

Key Takeaways

1. National and Regional Taxes: Most taxes in Italy are set at a national level, but regional surcharges also apply. Municipalities can adjust tax rates within certain limits.
   
2. Individual Taxes: Residents pay taxes on income, capital gains, inheritance, and vehicles. The progressive income tax ranges from 23% to 43%. Inheritance and gift taxes are among the lowest in Europe, between 4% and 8%.
   
3. Corporate Taxes: Companies in Italy are subject to a corporate income tax of 24%, a regional production tax of around 3.9%, and a VAT of 22%.
   
4. Property Purchase Taxes: When buying property, buyers must pay registration, mortgage, and cadastral taxes. Rates depend on whether the seller is a company or an individual and if the property is a primary or secondary residence.
   
5. Property Ownership Taxes: Owners pay municipal property tax, tax on local municipality services, and waste collection tax. Rates vary based on property type and location.
   
6. Special Tax Regimes: New residents can benefit from reduced tax rates, including high-net-worth individuals, foreign professionals, and retirees.
   
7. Italy Golden Visa: The quickest way to obtain residency is through the Italy Golden Visa program, which grants a residence permit within three months for a minimum investment of €250,000.

Frequently Asked Questions

What are the tax rates like in Italy?

Italy is known for having some of the highest taxes in the world. The maximum personal income tax rate reaches 43%, which is above the EU average of 37.8%. Additionally, there are regional and municipal surcharges to consider.

Do foreigners need to pay taxes in Italy?

Foreign residents in Italy must adhere to the same tax regulations as Italian citizens. Non-residents are taxed only on the income they earn within Italy, while tourists are required to pay a tax for hotel stays, with rates varying by city, duration, and type of accommodation.

What are the property taxes in Italy?

When purchasing property in Italy, you can expect the following taxes:

• Registration tax: 2-9% of the cadastral value
• Mortgage tax: €50-200
• Cadastral tax: €50-200

Selling property may involve a capital gains tax of 26% if the property’s value has increased. Property owners must also pay:

• Municipal property tax: 0.46-1.06%
• Tax on local services: 0.1-0.25%
• Waste collection tax: approximately €325

The exact rates depend on the property type and its location.

How much do residents pay in taxes in Italy?

Tax residents in Italy are subject to a progressive personal income tax ranging from 23-43% on their global income. Employees contribute 10% of their salary to social security, while self-employed individuals contribute 24%. Car taxes vary based on engine horsepower, region, and emission grade; for instance, a 180 horsepower engine car in Rome incurs an annual tax of about €504.

Is there a wealth tax in Italy?

Italy does not impose a general wealth tax. However, there are taxes on properties and financial investments owned by residents outside the country. Real estate is taxed at 0.76% of the cadastral value, and financial assets are taxed at 0.2% if the average annual stock value exceeds €5,000.

How is income tax structured in Italy?

Income tax in Italy is progressive, with the lowest rate applied to income under €15,000 and the highest rate of 43% for income over €50,001. Companies are taxed at a corporate income tax rate of 24%, along with a regional production tax of 3.9%.