Taxation in Italy

Taxation in Italy is levied by the central and regional governments and is collected by the Italian Agency of Revenue (Agenzia delle Entrate). Total tax revenue in 2012 was 44.4% of the GDP.[1] The total tax receipts in 2013 were €782 billion. The most important revenue sources are income tax, social security, corporate tax and the value added tax, which are all applied at the national level. Personal income taxation in Italy is progressive.

Income tax

Employment income is subject to a progressive income tax applying to all workers.

In 2013, the personal income tax rates were as follows:

Income range Tax rate[2]
€0 — €15,000 23%
€15,000 — €28,000 27%
€28,000 — €55,000 38%
€55,000 — €75,000 41%
over €75,000 43%

Individuals are considered resident for tax purposes if for the greater part of the tax year they satisfy any of the following conditions:

Exemption Area

Due to the different types of income, exemption from Irpef is determined at:

The area exempt from Irpef increases further if there are dependent family members.

Corporation tax

The corporate income tax (IRES) in Italy is 27.50% since the last tax reform. Some corporations are exempted from corporate tax, such as charitable foundations, church institutions and sports clubs.

Value added tax

Value added tax (VAT - IVA) is a consumption tax at a standard rate of 22%.[3] Reduced VAT rates apply at 10% for pharmaceuticals, passenger transport, admission to cultural and entertainment events, hotels, restaurants and 4% on foodstuffs, medical and books. The Italian VAT is part of the European Union value added tax system.[4]

Social security

Social security contributions (Istituto Nazionale della Previdenza Sociale - INPS) apply to everyone in the workforce. Employers withhold 9.19% of the employee's wage and the employer contributes 34.08% of gross pay.

Self-employed individuals must enrol with the Gestione Separata (INPS), unless other specific rules apply (for example, certain professionals, such as lawyers, engineers and accountants, are required by law to enrol in specified pension plans). The contributions to the INPS are calculated at a flat rate ranging from 18% to 27.72% on annual income up to a maximum income of €96,149 in 2012.[5]

Tax evasion and lack of guarantees

Italy has the largest number of "major tax evaders" in Europe, counting, according to the estimated figures,[6] tax evasion for over €180 billion. On the other hand, the problem is the best way to ensure the right of defense from the tax claim of the State.[7]

See also


  1. OECD revenue as a share of GDP statistics "Revenue Statistics". OECD. 2014-06-25. Retrieved 2014-06-25.
  2. Redazione internet Agenzia Entrate. "Agenzia delle Entrate - Income tax for individuals". Retrieved 2014-10-29.
  3. "KPMG".
  4. "VATGlobal".
  5. "Going to Italy" (PDF). HSBC.
  7. Buonomo, Giampiero (2015). "Codice del processo tributario, un convegno fa chiarezza". L’ago e il filo.   via Questia (subscription required)
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