The
IRPEF is the
Italian tax on the
income of individuals who are either resident in Italy and/or
earn income in Italy. Individuals who are resident in Italy must subject all income to IRPEF, while individuals who are not resident in Italy must pay tax only on income earned in Italy. The IRPEF is calculated on income from land, employment, self-employment, entrepreneurial activity, financial/capital and other income. The IRPEF is therefore often (incorrectly) equated with the payroll tax in Italy, although the payroll tax is only a sub-sector. The legal provisions provide for a number of deductions and tax deductions that reduce the tax base or the net tax.
The
IRPEF is a progressive tax, and until 2022 the following tax rates have been applied: up to 15,000 euros: 23%, from 15,001-28,000 euros: 27%, from 28,001-55,000 euros: 38%, from 55,001-75,000 euros: 41%, and above 75,000 euros: 43%.
As of 01/01/2022, IRPEF tax rates in Italy have been reduced from five to four, with rates for incomes reduced as follows:
Up to €15,000:
23% (as before)
between €15,000 - €28,000:
25% (instead of 27%)
between 28,000 - 50,000 €:
35% (instead of 38% up to 55.000 €)
from €50,000:
43% (instead of 41% between €55,000 - €75,000, from €75,000 43%)
For 2023, the IRPEF tax rates in Italy had been as follows: up to €15,000: 23%, from €15,001 - 28,000: 25%, from €28,001 - 50,000: 35% and above from €50,001: 43%
With the publication of Legislative Decree No. 216 of Dec. 30, 2023, which initiated the tax reform, progressive tax rates were reshaped effective from the year 2024, the previous 4 income brackets with their corresponding rates were reduced to 3.
For 2024, the following IRPEF tax rates apply in Italy: up to €28,000: 23%, from €28,001 - €50,000: 35%, over €50,001: 43%
In summary, this means that from 01.01.2024, the IRPEF tax rates in Italy have been reduced to three, with the rates for income being changed as follows
- up to 28.000 €: 23%
- form 28.001 to 50.000 €: 35%
- over 50.001€: 43%
Table Overview of income tax rates from 2024 in Italy:
|
Income
|
Tax rate IRPEF Italy 2024
|
|
< 28.000 €
|
23 %
|
|
28.001 - 50.000 €
|
35 %
|
|
> 50.001 €
|
43 %
|
For 2024, the IRPEF tax rates in Italy are now as follows: up to €28,000: 23%, from €28,001 - 50,000: 35%, and above from €50,001: 43%
The IRPEF is calculated using the income tax return "redditi", 730 or RED (for pensioners). The payment of a tax debt, when using the declaration "redditi" (which is mainly intended for companies) is usually June of the following year. The
I. payment on account is also made in
June; the
II. payment on account is made on
November 30. The payment is made through tax form F24. If the income tax return results in an IRPEF credit, this must also be offset against other taxes through F24.
In case of application of declaration 730 (for employees), the offset of the tax credit or tax liability is normally made on the pay slip of the months July-September (depending on the date of submission of the declaration).
Planned IRPEF Tax Rates and Income Brackets for 2025
The current reform proposal for 2025 aims to modify income brackets and tax rates, particularly to reduce the tax burden for low and middle-income earners. The adjustments under discussion, which are not yet final, include:
- Income up to 12,000 €: 0% (no-tax area, i.e., tax-exempt)
- Income up to 28,000 €: 23% (unchanged)
- Income between 28,001 € and 60,000 €: 35% (tax rates of 33% were also in duscission, however, this appears unlikely)
- Income over 60,000 €: 43% (unchanged)
This change would mean direct relief for taxpayers with middle incomes, while income up to 12,000 € would be completely tax-free. For incomes over 60,000 €, the tax rates remain unchanged.
Additional Planned Tax Benefits and Deductions for 2025
In addition to the new tax rates and income brackets, the government is planning additional tax benefits and deductions aimed at supporting specific income groups. The main planned changes include:
- Expansion of the no-tax area:
A tax exemption (no-tax area) for income up to 12,000 € could be introduced, providing tax exemption for this income group.
- Additional deductions for incomes from 20,000 € to 40,000 €:
An additional deduction of up to 1,000 € is planned for incomes up to 32,000 €, with the deduction reducing for incomes between 32,001 € and 40,000 €.
- Limitation of certain deductions for higher incomes:
Taxpayers with total income over 75,000 € may see limited deductions for specific expenses such as healthcare and education costs.
- Expansion of child deductions:
Deductions for dependent children will remain, but only for children under 30 years of age (exception: children with disabilities, who remain deductible beyond 30 years).
Status of IRPEF 2025 information: November 2024