The personal income tax (IRPEF) rates effective from 1 January 2024 have been updated. Legislative Decree no. 216/2023, published in the Official Gazette no. 303 of 30 December 2023, brought about these changes. It’s important to note that these rates are applicable for the fiscal year 2024 only and may not remain in effect beyond that date. Additionally, subsequent legislation could modify these rates before the publication of standard model tax returns for FY 2025 on FY 2024 income (expected in spring 2025).
For FY 2024, the Italian Income Tax rates are as follows:
– On the first €28,000 of annual income: 23%
– Above €28,000 up to €50,000: 35%
– Over €50,000: 43%
It’s essential to consider additional taxes when calculating your total tax liability.
These include the municipal tax supplement (imposta addizionale comunale), ranging from 0.1% to 0.9%, and the supplemental regional tax, varying from 0.70% to 3.33%, depending on your region and income bracket.
To determine the specific rates applicable to your region and municipality (Comune), you can search on the Italian Ministry website. Please note that some regions and many municipalities may not have published the FY 2024 rates and bands yet.
Substitute Taxes
The rates mentioned above apply only to income not subject to imposta sostitutiva (“substitute tax”), which replaces the main national income, regional, and municipal taxes. The applicability of substitute tax depends on the type of income, treatment under the law, and, in some cases, the taxpayer’s election.
Examples of income subject to tax at the rates mentioned in the table include income from employment, pension income (excluding qualifying pensions in the South of Italy), self-employment income, rent from Italian property (where the option for substitute tax is not taken), rent from non-Italian property, royalty income, and miscellaneous income.
Examples of income subject to substitute tax are pensions (where the option for a 7% substitute tax has been taken), investment income, interest, dividends, and capital gains (generally taxed at a flat rate of 26%, with lower rates applicable in some cases), and income from self-employment conducted under the flat tax regime for small businesses. Additionally, the substitute tax applies to investment and rental income only when received outside a business activity context (e.g., financial trading or property letting business).
Please note that this article serves as general information and does not constitute legal or fiscal advice. For personalized assistance tailored to your specific circumstances, it is recommended to consult with a professional advisor.
