Italy income tax 2026: IRPEF rates, the €300,000 flat tax and 183 days of residency

Italian income tax on individuals turns on one phrase: "for most of the tax period". Since 2024, a person is resident if, for at least 183 days of the year, or 184 in a leap year, they are physically present in Italy, have their civil-law residence there, or have their domicile there, domicile now meaning the place where their main personal and family relationships are carried on. The periods need not be consecutive. Fractions of a day count as whole days: the Agenzia delle Entrate's circular 20/E gives the case of a taxpayer who spends one hour in the country on 1 July and one hour on 31 December 2024, and both days count. A resident pays on income from anywhere in the world, a non-resident only on income produced in Italy. Everything then rests on a scale of three rates, and on one notable exception: the option, for people moving in, of paying a fixed annual sum on all their foreign income.

IRPEF rates for 2026: three bands

IRPEF rates after the 2026 budget law, repeated in article 11 of the new consolidated text. Above €200,000 of total income, a mechanism cancels the benefit of the cut from 35% to 33%.

The bands are progressive, so each rate only touches its own slice. On those rates alone, €20,000 of taxable income carries €4,600 of gross tax, €40,000 carries €10,400, and €50,000 carries €13,700, the figure the Agenzia publishes for that point. The 2026 budget law cut the middle rate from 35% to 33%. The Finance Ministry adds that the cut is neutralised for incomes over €200,000, and the Agenzia points to article 1, paragraphs 3 and 4, of Law 199/2025 for that mechanism. Be careful with the Agenzia's table itself: when we read it, the column still printed 35%, corrected by a notice above it.

The rates apply late in the calculation. You start from total income, take off deductible charges such as social security contributions, apply the bands to get gross tax, then subtract credits for employment, pension or self-employment income, dependants and certain expenses. Those credits generally stop at the amount of tax due, and the excess is lost. Article 11 of the consolidated text also clears small cases: no tax is due if your only income is a full-year pension of up to €7,500, land income of up to €185.92, and income from your main home. The Agenzia page we read does not deal with regional and municipal surcharges, so we give no figure for them. They are not included in the rates above.

Non-residents, and the 75% exception

A non-resident's total income only includes income produced in Italy, and only some deductions and credits are open to them, not the family ones. The exception is the taxpayer the Agenzia calls "Schumacker": with at least 75% of total income produced in Italy and no comparable benefit in the country of residence, all deductions and credits become available, under a decree of 21 September 2015.

Four criteria, and any one is enough

The circular reads the test as four alternative connecting factors, and meeting one of them for most of the year settles it. Physical presence is the one a calendar can prove. Civil-law residence and domicile can each make you resident with few days on Italian soil, which is why a low count on the counter above is not a clean bill of health. Domicile was a matter of economic interests before 2024; the law now looks to personal and family relationships.

The fourth factor is the population register. Since the 2024 reform, being registered for most of the year is no longer an absolute presumption: the circular calls it rebuttable, and proof to the contrary is allowed. Article 2 of the new text keeps that wording. Remote workers get a clear answer: someone working from home in Italy for 183 or 184 days becomes resident on that presence alone, and then owes tax on all their income, not only their pay, subject to any treaty. Conversely, the circular says that a stay which is merely temporary or occasional can be taken into account to exclude residence, and it does not set a number of days for that.

The flat tax for new residents: €300,000 on foreign income

The option exists today, and from 2027 it sits in article 246 of the new consolidated text. It covers foreign income, identified by reference to article 185. Income produced in Italy is outside it. You qualify by moving your tax residence to Italy after being non-resident for at least nine of the previous ten tax periods. The substitute tax does not depend on what you earn.

Three limits matter. Gains under article 76, paragraph 1, letter d) realised in the first five tax periods of the option stay outside the flat tax. A late or incomplete payment ends the regime, and the Agenzia adds that voluntary correction cannot repair it. And an exit, by revocation or by losing the regime, bars any new option. Family members, those listed in article 433 of the Civil Code who meet the same condition, fall with the main taxpayer, though not the reverse.

Two official texts do not line up, and we report both. The Agenzia's page of 16 January 2026 still shows €200,000 and €25,000 in its body, under a notice giving the new sums, and it describes the ruling request as optional. Article 246, paragraph 3, says that the option is exercised after a favourable answer to a specific ruling request, filed by the return deadline for the year of the move. Check the current position with the Agenzia before relying on either, particularly for a move in 2026.

A second flat rate: 7% on foreign pensions in the south

Article 247 offers a different option. People receiving a foreign pension can opt for 7% on their foreign income if they move to a municipality of no more than 30,000 inhabitants in Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise or Puglia, or to certain municipalities affected by earthquakes. They must not have been resident in Italy in the previous five tax periods, and must come from a country with an administrative cooperation agreement. The option lasts for the first nine tax periods after it takes effect.

Why the text changes on 1 January 2027

Legislative Decree 117 of 19 June 2026 is a new consolidated text on income taxes, in force since 4 July 2026. Its article 377 says that its provisions apply from 1 January 2027. So for 2026, the 1986 code still governs, as amended; from 2027 article numbers change: the residence test sits in article 2, the rates in article 11 and the flat tax in article 246. The substance we compare above is the same on the residence test and on the rates. We did not compare the two codes line by line beyond that.

Counting a calendar year when part days count

Italy's window is the calendar year, and it does not slide. A stay from September to March splits across two years and can leave you under the line in both. That is the reason this counter wants your actual trips. The engine counts any day touched, so arriving on the last evening of a month gives you that day, and it moves the threshold to 184 when the year has 366 days. It reproduces the circular's example of nine non-consecutive stays in 2024: 184 days and residence.

A year split between two countries is not automatically two half-years. The Agenzia says that the option to divide the tax period when you relocate exists only under the treaties with Switzerland and Germany, and on another page it adds Panama. Otherwise, when your former country also claims you, the question moves to the treaty, which we cover under dual tax residency without having reviewed Italy's treaties one by one. Compare the neighbouring rules in France or in the country table. The Taxlag app can keep the count from one year to the next.