Taxes to Pay as an Italian Tax Resident

If you’re thinking about making your living-in-Italy dream a reality, you’ll need to understand Italian bureaucracy and taxes. Here’s an overview of the taxation in place for residents.

Many who visit Italy for a holiday fall in love with the country’s stunning natural beauty, historic buildings and unparalleled cuisine and wine. Some decide to return many times and even buy a home in Italy for these reasons.

But what happens if you make the decision to move to Italy full time and turn your travels or second home into your primary residence?

Spending more than six months of the year in Italy means that you might meet the requirements to be considered a tax resident in Italy and might no longer be considered a tourist – as such, you might be liable to pay Italian taxes.

Once you’ve jumped through the necessary hoops to officially move to Italy, such as obtaining the relevant visa for your circumstances and registering as a resident with your local municipality (Comune), you’ll also need to be prepared to comply with Italian tax obligations and possibly pay taxes to the Italian government on all your worldwide income.

Note that if you live in Italy most of the time or if Italy is where you have most of your interests anyway, you might be considered an Italian tax resident even if you are not registered as a resident with the Ufficio Anagrafe (the Municipal Registry Office).

Read also: Residency Registration vs Tax Residency

Paying taxes on worldwide income means that all your earnings from everywhere are taken into account, not just income generated in Italy. Therefore, if you earn income from a rental property in the United States or if you have a pension from the UK, you might have to pay taxes on that revenue to Italy.

There are agreements to avoid double taxation in place so that you don’t pay income taxes twice. When an income is subject to taxation in two countries, you’d be expected to pay the highest amount applicable, which would be distributed between the two countries according to the treaty.

READ ALSO: Double taxation

What taxes do I need to pay?

There are three main types of taxes you’ll need to consider as an Italian tax resident.

The default personal income tax is called “IRPEF“. It is a progressive tax and the tax brackets range from 23% to 43% depending on your earnings; the Italian government has reduced the number of income tax bands, also lowering rates for those with lower incomes.

It’s worth remembering that there are certain generous tax breaks for some categories of people, such as new residents and pensioners in some parts of Italy.

The Italian Revenue Agency (Agenzia delle Entrate) has information in English on these topics: double taxation, tax incentive programs and how to calculate your personal income tax payments.

Other taxes owed to the authorities include regional income taxes and municipal income taxes (addizionale regionale and addizionale comunale), which will change depending on where your residence is and your income level. However, in some cases, those local income taxes do not apply. For example, they do not apply if you qualify for a special flat tax program, such as the 7% retiree relocation program or the 5%-15% income tax for small self-employment businesses.    

Lastly, if you have a job in Italy, there are also social security contributions to pay to the Italian National Pension Fund, known as ‘INPS’, which cover government services such as national healthcare, employee sickness and parental leave, for example. That said, some countries have agreements with Italy so that you might avoid paying INPS.

How you pay this – and how much – will depend on your employment status and personal income.

How do I pay taxes in Italy?

You’ll need to file a tax return every tax year, which in Italy, is the same as the calendar year and runs from January to December. You’ll pay taxes on income generated the past year, so what you pay in 2026 will be for the earnings you made in 2025 as well as an estimated amount for 2026 tax year based on income and assets reported for 2025 tax year.

Not everyone needs to fill out tax forms, however. If you have one employer, for example, you’ll be taxed at source and often you don’t need to complete any paperwork.

If you do need to file a tax return, you’ll need to become familiar with Italy’s various deadlines and Italy’s Revenue Office website.

What if I am not an Italian tax resident but have Italian income?

If you are not an Italian tax resident and you earn income sourced in Italy (for example, if you own an Italian property that you rent out) while you live outside of Italy, you will be expected to file a non-resident tax return in Italy to report the Italian property rental income and pay the applicable Italian taxes related to that income only. For example, you might apply for the 21% flat tax on rental income (cedolare secca).

What about property tax?

If you own an Italian property as a non-resident you would be expected to pay an annual property tax called Imposta Municipale Unica, or IMU. This is an estate tax and is based on the value of your property on record (valore catastale).

If you use the Italian property as your primary residence, you would not pay taxes on such property unless it has a luxury tax classification, in which case IMU will be still be due. Other exceptions apply. In this article you can find more information about IMU.

Another annual property tax is TARI (Tassa sui rifiuti – the trash/waste collection tax). TARI must be paid by the occupier/tenant. If you are renting, check your lease agreement to see if TARI is on you or the landlord. If there is no specific term about it, tenant liability applies by default.

If you’re considering buying a property in Italy, you’ll need to prepare yourself for the property taxes that come on top of the sale price. For a guide on Italy’s house purchase fees, see here.

How can I get more advice on my personal circumstances?

We assist people with tax and estate planning. Our work includes advice about strategies to prepare your estate overseas in a tax efficient manner before moving to Italy or while living in Italy. We also assist clients with Italian tax return preparation thanks to our team of tax lawyers and certified accountants (commercialista). We review your profile with your trusted home country accountant and, if you do not have one that is versed in cross-border taxes, we are happy to refer you to one. We have a solid record of helping our clients to plan and secure residency in Italy in a tax efficient and transparent manner.

If you want to find out more, we can guide you on areas such as:

• How do I register as a resident in Italy?
• What permits do I need for that?
• How do I register for residency as an EU citizen?
• What if I’m from outside the EU?
• How much  will my personal income tax be?
• What if I’m self-employed? Will my personal income tax be different?
• Am I eligible for any tax incentive programs?
• When and how do I file my tax returns?
• I earn income from several countries. How do I pay taxes to Italy from various sources?
• I own more than one house – how will that affect the property tax I pay in Italy?
• If I make Italy my primary residence, do I need an Italian bank account?
• What healthcare will I be eligible for if I become a tax resident of Italy?

You can set up time to talk to one of our tax professionals here.

Related information:

• Residency registration vs tax residency
• Italian residency application timing
• Italian Property Owner’s Guide To Italian Income Tax