There are three prinicipal income taxes which have to be paid as well as contributions to the State pension and social security scheme (INPS). Taxes can be paid on your behalf by your employer, deducting from your salary. If you are self employed then you have to make the tax payments yourself. 

Tax Returns

Tax returns can be filed in May and June and there are two methods of making your return: 730 & UNICO

730: This option is only available to people who are employed by companies and who do not have secondary sources of income*. The 730 can be self compiled or compiled by an authorised entity. In both cases the form is electronically submitted to the tax authorities via the authorised entity (this service is free if self compiled). The tax payable or receivable is then added to or deducted from the payslip of the next July and/or November.

UNICO: This tax declaration can be made by all tax payers. The main difference from the 730 is that any taxes to be paid have to be done so directly by the tax payer, or, in the case of a credit, the tax payer must make a claim to the authorities. 

CUD

The CUD is an annual declaration of taxes witheld from your payslips by your employer. An employer must issue the CUD on or before the 28th of February every year. The CUD is used to detemine the taxes already witheld in a fiscal year.

Italian Taxes

There are three prinicpal taxes to be paid on income in Italy. IRPEF is the National income tax and then there are regional taxes and municipal taxes which can vary and depend on where you are fiscally resident. 

For 2024 the rates of IRPEF are:

• 0 - €28,0000     23%

• 28,001 - 50,000       €6440 + 35% of the excess of 15,000

• over 50,000 -     €14140+ 43% of the excess of 50,000​​

There are various credits available for "dipendenti" (employees), as well as people with children  or supported people (non working spouse). The credit depends on the level of salary and decreases, the higher the salary. 

There are also some tax deductions for foreigners who decide to relocate to Italy for work, and also for foreigners who wish to move their residence to Italy and have a high level of wealth/income.  

Regional and Municipal taxes vary on the location of residence. 

INPS

Social security contributions are taken off at source by employers and are about 9% of salary. Employers also contribute a further 28-30%. For self employed workers the rate of INPS varies from 25-29%.

How and when do I pay?

As mentioned above taxes payable are deducted from pay-slips and paid by employers.

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Balances/credit are paid/reimbursed from July pay-slips (and in some cases November).

For self-employed workers, taxes can be paid in June, or spread over 5/6 months from June/July to November. The same goes for INPS. Taxes and INPS are payable in advance, therefore the payment usually involves the calculation of any residual debt/credit from the previous year and then the advance payment of the current year. 

There are two corporate taxes to be paid in Italy. IRES, which is set at 24% and IRAP which is set on a regional basis and varies between 3,9% and 8,5% (depends on region and type of company).

Both taxes are payable as follows:

Any balance from the previous year and 40% of the current year's total is payable in mid-June. This can be delayed until mid-July with an added sanction of 0,40%. The remaining 60% balance is payable in November.. 

IRAP is calculated on the activity of the company. As a rule of thumb, therefore, it is the total income minus direct productivity expenses (excluding payroll costs). Most payroll costs are deductible with the largest exception being made for costs of staff who are on fixed term contracts. 

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