Comprehensive Italian Tax Handbook for the Year 2025

Living in Italy: A Tax Primer for Giampietro Vianello in 2025

Kickback your feet, Giampietro, and let's dive into the nitty-gritty of Italy's tax system in 2025.

Deadlines, deadlines, deadlines

Italian tax season is a whirlwind, with late spring being a bustling time for taxpayers. The window to file the annual income tax declaration typically opens in late spring, and it's crucial to meet those deadlines. Failing to do so can result in penalties and interest, so keep the dates in mind.

Being an Italian tax resident isn't only for those with formal residency. If you spend more than half the year in Italy, regardless of official registration, you're considered a tax resident. But even if you're not a resident, you might still need to file and pay taxes on income generated within Italy.

When it comes to income tax declarations, you'll need one of two forms depending on your personal situation and income source. To check the official deadlines for the year, look no further HERE.

Besides income tax deadlines, there's another crucial date to keep in mind if you own property in Italy:

The first instalment of Italy's tax on second homes IMU (Imposta Municipale Unica) is due by June 16th.
The second instalment is due by December 16th.

You can find these and other key tax dates in our handy calendar.

Newbies, welcome aboard

Are you declaring taxes in Italy for the first time? No worries, here's what you'll need to do. First, obtain a codice fiscale, Italy's personal identification number, if you haven't already. You can find a guide to that HERE.

The income tax declaration you'll file covers the 2024 tax year, which runs from January 1st, 2024 to December 31st, 2024. If you moved to Italy after January 1st, 2025, you won't have to file the declaration until next year (unless you generated income in Italy during 2024). On the other hand, IMU payments are always relative to the year when you make the payments, i.e., 2025.

Online vs Pen and Paper

Most tax declarations can be filed online using the personal profile area of Italy's Revenue Agency (Agenzia delle Entrate) website, where you can find a pre-compiled version of the income tax declaration form (modulo 730).

However, if you don't have internet access or feel uncomfortable completing tasks online, you can visit or call your local branch of Italy's Revenue Agency to request paper versions of the forms, which you can submit at the same office.

Bureaucracy, a sweet Italian specialty

Italy's tax assistance centers (Centri di Assistenza Fiscale, or CAF) can also provide tax declaration forms in paper format, as well as instructions and guidance on how to fill them out.

Italy's Tax Brackets.

Italy's progressive income tax, Irpef, applies to employees, many self-employed workers, and pensioners. The government has reduced the number of available tax brackets from four to three, as of December 2023.

Your 2024 taxable income will be taxed based on the three-bracket system below:

Up to €28,000: 23 percent
Up to €50,000: 35 percent
Over €50,000: 43 percent

Foreign income

If you're an Italian tax resident, you'll need to declare your global income, including any generated outside of Italy. It's essential to note that declaring your foreign income does not necessarily mean you'll have to pay taxes on it twice thanks to dual taxation agreements with most countries, including the UK and the US.

Foreign Assets and Bank Accounts

Italian tax residents who hold financial assets abroad, such as real estate, financial investments, unit trusts, and foreign bank accounts, are required to declare them, and they might have to pay additional taxes such as IVIE and IVAFE on foreign real estate and foreign financial activities.

Retirees who've opted for the seven-percent flat tax rate are exempt from the requirement to declare (and pay) IVIE and/or IVAFE on foreign assets.

Tax breaks

Italy offers multiple tax breaks to help taxpayers, including tax deductions that lower your taxable income and tax reductions that lower your final tax bill. Tax reductions for 2025 apply to various expenses, such as rent, public transport, and education expenses, and include a 19-percent tax break on medical expenses (exceeding €129.11).

Taxes for second-home owners

If you're a non-resident with a second home in Italy, be aware of the following:

Whether you are considered a tax resident, as defined by spending at least 183 days a year in Italy and officially registering with the National Registry of the Resident Population or having your primary residence in Italy.
If you generate income (e.g., through renting your property, including on Airbnb) in Italy, you'll need to declare it.

Even if you're not an Italian tax resident and don't generate any income in Italy, you'll still have to pay the IMU property tax and the TARI waste disposal tax. For more information about Italy's IMU tax and this year's deadlines, check HERE.

Getting help

If the Italian tax system seems overwhelming, don't sweat it! Help is available, from tax assistance centers for simpler situations to qualified tax experts for more complex tax situations.

Please note that our website is unable to provide individual advice. For further information on Italian taxes, visit the Italian Revenue Agency's website or seek independent advice from a qualified tax professional or tax assistance center.

Remember, this guide is just a primer. For detailed, personalized information, consult your local tax authority or a professional tax advisor.

Enrichment Data Integration:

If you spend more than 183 days in Italy in a calendar year, regardless of formal residency, you are considered a tax resident.
The primary income tax return form for individuals is the Redditi PF, which must be filed online by November 30 of the following year for the previous tax year.
The income tax brackets and rates for 2024 are:
Up to €28,000: 23%
€28,001 - €50,000: 35%
Over €50,000: 43%
Self-employed workers must make two advance tax payments based on the previous year's liability: 40% due in June and 60% due in November.
Foreigners who qualify may benefit from the U.S. Foreign Earned Income Exclusion (FEIE) if they file U.S. taxes, which can exclude up to $130,000 of foreign-earned income if qualifying under the Physical Presence Test or Bona Fide Residence Test.
Failing to meet filing or payment deadlines can result in penalties and interest.
To file the annual income tax declaration in Italy, you'll need to meet the deadlines, otherwise penalties and interest will be incurred.
If you spend more than 183 days in Italy in a calendar year, regardless of formal residency, you are considered a tax resident.
The primary income tax return form for individuals is the Redditi PF, which must be filed online by November 30 of the following year for the previous tax year.
The income tax brackets and rates for 2024 are:
Up to €28,000: 23%
€28,001 - €50,000: 35%
Over €50,000: 43%
If you own property in Italy, the first instalment of Italy's tax on second homes, IMU (Imposta Municipale Unica), is due by June 16th, and the second instalment is due by December 16th.
Self-employed workers must make two advance tax payments based on the previous year's liability: 40% due in June and 60% due in November.