tax for foreign owners
Tax in Italy for Foreigners Who Own a Company
By Andrea Sala, Tax and Cross-Border Compliance Lead, Milan · Reviewed by Stefano Colombo · Updated 12 October 2026
Rules as in force in 2026 · next review January 2027
One question, two taxpayers: the foreign owner, taxed by residence, and the Italian company, taxed on its profit before anything is paid out.
Tax in Italy for foreigners follows tax residence, not nationality. In 2026 a resident pays IRPEF on all income, a non-resident only on income produced in Italy (Art. 3(1) TUIR). A company owner meets a second layer: the company pays IRES at 24%, and a dividend paid abroad bears a 26% final withholding, 1.20% to an EU or listed EEA company.
Does Italian tax follow your passport or your residence?
Every individual, resident in Italy or not, is a taxpayer of IRPEF (imposta sul reddito delle persone fisiche, personal income tax) under Art. 2(1) TUIR, in the text in force from 29 December 2023 to 31 December 2026. What decides how much of their income Italy taxes is residenza fiscale (tax residence), and the residence test of Art. 2(2) names no nationality.
The one citizenship rule in the article runs the other way. Italian citizens cancelled from the population register who move to a State not listed by decree of the Ministry of Economy and Finance are still treated as resident unless they prove otherwise (Art. 2(2-bis) TUIR). It concerns Italian passport holders, not foreigners arriving. What another country charges its own citizens is outside Italian law and outside this guide.
For the owner of an Italian company, Italy tax has two layers: the company's own tax, then the tax on what leaves the company. The company's books and returns run on a calendar of their own, set out in our accounting and compliance overview. VAT at the till, IMU, TARI, the tourist-stay tax, stamp duty and inheritance tax are not covered here.
How does Italy decide whether you are tax resident?
Art. 2(2) TUIR, in the text applying from 1 January 2024, treats a person as resident for the year if, for most of the tax period and counting fractions of a day, they have one of three links with Italy. The three links are alternatives: one is enough.
- Residence in Italy as the Civil Code defines it.
- Domicilio (domicile) in Italy: where personal and family relations mainly develop.
- Presence in Italy.
- Fractions of a day count towards most of the tax period.
- The article prints no number of days.
- Entry in the anagrafe della popolazione residente (municipal population register): a rebuttable presumption.
Registration is not a fourth link. It sits in a sentence of its own: a person registered for most of the tax period is presumed resident, and proof to the contrary displaces the presumption (Art. 2(2) TUIR). A person resident in two States under their own laws is placed by the treaty's tie-breaker; under the UK-Italy Convention its first step is the permanent home available to them (Art. 4(2)). The ruling request described below concerns the flat tax, not this test.
What does a non-resident pay Italian income tax on?
For a resident, reddito complessivo (total income) is all income held, net of the deductible charges of Art. 10; for a non-resident it is only redditi prodotti nel territorio dello Stato (income produced in Italy), under Art. 3(1) TUIR, text in force from 23 May 2026 to 31 December 2026. Income that is exempt, or bears a ritenuta a titolo d'imposta (final withholding) or an imposta sostitutiva (substitute tax), stays out of the base (Art. 3(3)(a)).
Under Art. 23(1) TUIR, income produced in Italy includes:
- Capital income paid by Italian-resident payers, bank-deposit interest excluded.
- Self-employment income from activity carried on in Italy.
- Business income through a stabile organizzazione (permanent establishment) in Italy.
- Gains on shares of Italian-resident companies, listed non-qualified holdings excepted.
- Gains on shares of a foreign company whose value, at any time in the 365 days before the sale, derives for more than half, directly or indirectly, from real estate in Italy; listed shares excepted (Art. 23(1-bis)).
- A director's fee paid by an Italian company (Art. 50(1)(c-bis), Art. 23(2)(b)).
Income tax in Italy for a non-resident is computed with fewer allowances. Only the charges of Art. 10(1) letters a, g, h, i and l are deductible (Art. 24(2) TUIR); the Art. 13 credit and some Art. 15 and 16-bis credits are allowed, family-load credits are not (Art. 24(3)). Art. 24(3-bis) lets a non-resident of a State that ensures an adequate exchange of information, with at least 75% of total income from Italy, be taxed as a resident where they enjoy no similar relief in their State of residence. This guide does not state which States qualify, and gives no rate for a director's fee.
What are the Italian income tax rates for 2026?
Personal income tax in Italy runs on three brackets, set by Art. 11(1) TUIR in the text in force from 1 January to 31 December 2026. A resident applies them to all income; a non-resident applies them to income produced in Italy only.
| Taxable income band | IRPEF rate | Source |
|---|---|---|
| up to EUR 28,000 | 23% | Art. 11(1) TUIR, text 1 January to 31 December 2026 |
| above EUR 28,000 to EUR 50,000 | 33% | same |
| above EUR 50,000 | 43% | same |
Source: Art. 11(1) TUIR (Normattiva).
Regional and municipal surtaxes (addizionale regionale, addizionale comunale) are due on top. The municipal surtax goes to the municipality of tax domicile on 1 January and is paid with the IRPEF balance; the municipality may vary its rate by no more than 0.8 percentage points in total (Art. 1 D.Lgs. 360/1998). The base and regional percentages follow separate rules this guide does not state, so it prints no total rate and no worked salary example.
What does the Italian company pay before any profit reaches you?
The company pays IRES (imposta sul reddito delle società, corporate income tax) at 24%, as the Agenzia delle Entrate's IRES page states; a company not resident in Italy pays it only on income produced in Italy. An S.r.l. and an S.p.A. pay the same rate. The consolidated income-tax text that takes over from 1 January 2027 restates 24%, according to the Ministry of Economy and Finance's documentation database.
IRAP (imposta regionale sulle attività produttive, regional production tax) applies at 3.9% in operation, per the Agenzia's IRAP 2026 instructions; sector and regional rates differ and are not tabled here. The owner's own tax comes after both layers, on what the company pays out.
What does Italy withhold when profit leaves the company for a foreign owner?
The Italian company is the payer, and it applies the withholding that fits the payment and the recipient. Art. 3(1) D.L. 66/2014 sets withholdings and substitute taxes on capital income, and on the gains of Art. 67(1)(c-bis) to (c-quinquies) TUIR, at 26% wherever they occur. Each payment has its own article, starting with Art. 27 D.P.R. 600/1973 for the dividendo (dividend); the others are interessi (interest), canoni (royalties) and plusvalenze (capital gains).
| Payment to a non-resident owner | Italian tax in 2026 | Article | Relief route |
|---|---|---|---|
| Dividend to a non-resident | 26% final | Art. 27(3) D.P.R. 600/1973 (prints 27%, not operative); D.L. 66/2014 Art. 3(1) | refund of tax paid abroad on the same profits, up to 11/26 of the withholding; a treaty cap |
| Dividend to a company in an EU or listed EEA State | 1.20% final | Art. 27(3-ter), applying from 1 January 2026 | none further tabled |
| Dividend to an EU parent meeting Art. 27-bis (10% held for one year, among other conditions) | a refund on request, or non-application at source on request | Art. 27-bis D.P.R. 600/1973 | documents held by the payment date |
| Interest | 26% final | Art. 26(5) (prints 12.50%, not operative); D.L. 66/2014 Art. 3(1) | EU associated companies meeting the form, residence and subject-to-tax conditions, 25% of the votes, one year (Art. 26-quater); a treaty cap |
| Royalties | 30% final, on the taxable part | Art. 25 D.P.R. 600/1973 | Art. 26-quater; a treaty cap |
| Fees for self-employment-type services performed in Italy | 30% final (fees for services performed abroad, and fees paid to an Italian permanent establishment, excluded) | Art. 25 D.P.R. 600/1973 | a treaty (not tabled) |
| Gain on shares of an Italian company | individual: 26% substitute tax; qualifying EU or EEA company: 5% of the gain counted | D.L. 66/2014 Art. 3(1); Art. 68(2-bis) TUIR | a treaty may leave it to the seller's State (UK-Italy Art. 13(4)) |
Sources: D.L. 66/2014; D.P.R. 600/1973, Arts. 25, 26, 26-quater, 27 and 27-bis; TUIR, Art. 68; the UK-Italy Convention; the Agenzia's Brexit FAQ.
A dividend under a final withholding is outside a non-resident's IRPEF base (Art. 3(3)(a) TUIR). By arithmetic on Art. 27(3), the 11/26 refund returns up to 11 points of the dividend where tax was paid abroad on the same profits.
How do the EU rate and the Parent-Subsidiary route work?
Three EU routes sit beside the 26%: a reduced rate, the route of the direttiva madre-figlia (Parent-Subsidiary Directive) in Art. 27-bis D.P.R. 600/1973, and an exemption for interest and royalties. A UK company has been a Paese terzo (third country) for all three since 1 January 2021, per the Agenzia's Brexit FAQ.
Step 1: An EU or listed EEA company, 1.20% final
Dividends to a company resident in an EU State, or in an EEA State on the decrees under Art. 11(4)(c) D.Lgs. 239/1996, bear 1.20% (Art. 27(3-ter), replaced by Art. 11 D.L. 38/2026 and applying from 1 January 2026).
Step 2: An EU parent, 10% held for one year
The parent is resident for tax in an EU State and holds directly at least 10%, without interruption for at least one year. It also takes one of the legal forms listed in the annex to the Parent-Subsidiary Directive and is subject, without an option or exemption, to one of the corporate taxes the Directive lists (Art. 27-bis(1)(a), (c)). The 10% applies to profits distributed from 1 January 2009; the 20% still printed in Art. 27-bis(1) is not operative.
Step 3: The proofs
The parent produces a certificate of its foreign tax authority and its own declaration on the holding (Art. 27-bis(2)).
Step 4: A refund on request
The parent has the right, on request, to the refund of the withholding of Art. 27(3), (3-bis) and (3-ter) (Art. 27-bis(1)).
Step 5: Or non-application at source on request
On the parent's request the payer may leave the withholding unapplied, if it holds the documents by the payment date and keeps them with the request until the assessment terms have run (Art. 27-bis(3)). Without them, the tax is withheld and refunded.
Step 6: Interest and royalties between EU associated companies
Exempt where both companies meet the article's form, residence and subject-to-tax conditions and a holding of at least 25% of the voting rights is kept without interruption for at least one year (Art. 26-quater D.P.R. 600/1973). Closed to UK recipients for payments from 1 January 2021.
How does a double tax treaty change what Italy takes?
Italy's tax treaties set ceilings on what Italy may take at source. This guide uses one convenzione contro le doppie imposizioni (double tax agreement) as its worked example: the UK-Italy Convention, signed at Pallanza on 21 October 1988, given effect in the UK by S.I. 1990/2590, with the English and Italian texts equally authoritative. Its caps: dividends 5% of the gross where the beneficial owner is a company controlling at least 10% of the voting power, otherwise 15% (Art. 10(2)); interest 10% (Art. 11(2)); royalties 8% (Art. 12(2)).
How a treaty and Italian law sit together is written in Art. 169(1) TUIR, in the text in force from 1 January 2004 to 31 December 2026: the provisions of the TUIR apply, where more favourable to the taxpayer, also in derogation from double-tax agreements. The taxpayer relies on the more favourable rule; which one that is for a given owner is not decided on this page.
Under the Convention, tax withheld above the cap is refunded on application, accompanied by a certificate of the State of residence, within the time limit of the State that withheld (Art. 29). An Italian resident proves residence to a foreign payer with the attestato di residenza fiscale (tax residence attestation) the Agenzia delle Entrate issues for treaty claims. For the request itself, see tax residency certificate Italy.
Under the same Convention, a gain on shares of an Italian company is taxable only in the seller's State of residence (Art. 13(4)), except that the State the seller left may tax an individual who was its resident at any time in the five years before the sale and is not taxed on the gain in the State of residence (Art. 13(5)); more in the treaty limits on Italian capital gains tax. A UK resident's fees as director of an Italian company may be taxed in Italy (Art. 16). No other treaty is tabled here.
Residence, holder and treaty route not fixed yet? We review the owner's Italian tax position with you before the registration.
How much of EUR 100 of profit reaches each kind of owner?
A worked example, derived from the rates tabled above: before IRAP, before the Art. 27(3-bis) withholding on excess shareholder financing, before the owner's own State's tax and before any relief not tabled. It ranks nothing and is not advice. IRES at 24% leaves EUR 76.00 for a dividend.
| Owner position | Rule | Italian tax on the EUR 76.00 dividend (derived) | Left with the owner (derived) |
|---|---|---|---|
| Individual not resident in Italy | 26% final | EUR 19.76 | EUR 56.24; up to EUR 8.36 back where tax was paid abroad on the same profits (11/26) |
| Company in an EU or listed EEA State | 1.20% final | EUR 0.91 | EUR 75.09 |
| EU parent meeting Art. 27-bis | left unapplied at source on request if the documents are held by the payment date, otherwise refunded on request | EUR 0.00 | EUR 76.00 |
| UK company, if the Convention cap applies | cap of 5% (control of 10% or more) or 15% of the gross; refund route Art. 29 | EUR 3.80 at 5%, EUR 11.40 at 15% | EUR 72.20 or EUR 64.60 |
| Individual resident in Italy | 26% final | EUR 19.76 | EUR 56.24 |
Sources: Agenzia delle Entrate (IRES); D.P.R. 600/1973, Arts. 27 and 27-bis; the UK-Italy Convention, Arts. 10(2) and 29.
EUR 100 of profit of the Italian company: IRES at 24% leaves EUR 76.00 for a dividend
Individual not resident in Italy
26% final withholding (Art. 27(3) D.P.R. 600/1973; Art. 3(1) D.L. 66/2014)
- EUR 19.76withheld
- EUR 56.24leftup to EUR 8.36 back where tax was paid abroad on the same profits (11/26)
Company in an EU or listed EEA State
1.20% final withholding (Art. 27(3-ter) D.P.R. 600/1973)
- EUR 0.91withheld
- EUR 75.09left
EU parent meeting Art. 27-bis
the Parent-Subsidiary route (Art. 27-bis D.P.R. 600/1973)
- EUR 0.00withheldleft unapplied at source on request if the payer holds the documents by the payment date; otherwise withheld and refunded on request
- EUR 76.00left
Individual resident in Italy
26% final withholding (Art. 27(1) D.P.R. 600/1973)
- EUR 19.76withheld
- EUR 56.24left
Derived from the rates tabled; before IRAP, before the Art. 27(3-bis) withholding on excess shareholder financing, before any tax of the owner's own State and before any relief not tabled. Not advice.
Beside the UK row, Art. 169(1) TUIR applies as written: the TUIR where more favourable to the taxpayer. No case is decided by this table.
In what order does a foreign owner settle their Italian tax position?
The order follows the statute's logic. Each step names its actor and its rule; none concludes which option suits a given owner.
law statute or treatyAgenzia Agenzia delle Entrate
- 1
Residence for the year
The owner, with their adviser
- law residence, domicile or presence for most of the tax period (Art. 2(2) TUIR)
- law the register entry: a rebuttable presumption
- 2
Vehicle and flow of profit
The owner, before the registration; the notary receives the deed
- Agenzia IRES at 24%
- law then the withholding by owner position (Art. 27 D.P.R. 600/1973)
- 3
Relief claimed
The owner's tax authority issues the certificate; the Italian company applies the withholding
- law the EU rate (Art. 27(3-ter))
- law the Parent-Subsidiary route (Art. 27-bis)
- law a treaty cap, with a certificate of residence (UK-Italy Convention, Art. 29)
- 4
Flat-tax ruling before a move
The owner, to the Agenzia's Divisione Contribuenti
- law the interpello (ruling request) lodged by the return term for the year of the move (Art. 24-bis TUIR)
- 5
Proof of Italian residence
The resident owner, at any territorial office of the Agenzia
- Agenzia the attestato di residenza fiscale (tax residence attestation) for a foreign payer
Order only: no duration on any step
Step 1: Fix the residence position for the year
The owner, with their adviser, under Art. 2(2) TUIR: residence, domicile or presence for most of the tax period, with the register entry as a rebuttable presumption.
Step 2: Choose the vehicle and the owner's position before the registration
The rate chain above, read for each owner position: IRES, then the withholding by payment and recipient. The notary receives the deed of an S.r.l. or S.p.A.
Step 3: If the owner stays abroad, arrange relief at source
The owner's tax authority issues the certificate; the Italian company applies or omits the withholding under Art. 27-bis, or the treaty refund route of Art. 29 applies.
Step 4: If the owner will move, ask the flat-tax ruling first
The interpello (ruling request) goes to the Agenzia's Divisione Contribuenti by hand, registered post with return receipt or PEC, by the return term for the year of the move.
Step 5: When a foreign payer asks for proof of Italian residence
The resident owner requests the attestato di residenza fiscale from any territorial office of the Agenzia delle Entrate.
Reviewing a given owner's position against these steps is work for a tax adviser for an Italian company.
What changes if the owner moves to Italy?
Once resident, the owner pays IRPEF on all income, at the brackets above, and a dividend from the Italian company bears a 26% final withholding on qualified and non-qualified holdings alike (Art. 27(1) D.P.R. 600/1973). Italy tax for new residents also offers three regimes to people who move: the regime dei neo residenti (flat tax for new residents), the lavoratori impatriati (inbound-worker) regime and a 7% regime for foreign pensioners. The table gives the bare rule of each, as in force in 2026.
| Regime | Who qualifies | Amount | Duration | Where it is covered |
|---|---|---|---|---|
| Flat tax for new residents (Art. 24-bis TUIR) | an individual who transfers residence after at least nine non-resident tax periods within the ten before the option; a favourable ruling first | EUR 300,000 per tax period on foreign-source income; EUR 50,000 per family member | effects stop after fifteen years | the founder's residence route, below |
| Inbound-worker regime (Art. 5 D.Lgs. 209/2023, Agenzia summary) | workers moving tax residence from tax year 2024; not resident in the three preceding periods; a four-year commitment; work mostly in Italy; highly qualified or specialised | 50% of employment-type and professional income counts, within EUR 600,000 a year (40% for a worker who moves with a minor child, or whose child is born or adopted in the period and is resident in Italy, Art. 5(4)-(5) D.Lgs. 209/2023) | the year of the move and the four following | not on a page of its own |
| 7% regime for foreign pensioners (Art. 24-ter TUIR) | holders of foreign pensions moving to a municipality of a listed southern region or earthquake area with at most 30,000 inhabitants; not tax resident in Italy in the five preceding tax periods (Art. 24-ter(2)) | 7% substitute tax on foreign income | not stated here | not on a page of its own |
Sources: TUIR, Arts. 24-bis and 24-ter (Normattiva); Agenzia delle Entrate, page on the inbound-worker regime.
What is flat tax in Italy, in four facts from Art. 24-bis TUIR. A favourable answer to the ruling request comes first, lodged by the return term for the year of the move. The sum is paid in one instalment by the date for the income-tax balance. It covers foreign-source income, so the Italian company's dividend, which is Italian-source, stays outside it. Gains on qualified holdings realised in the first five periods stay under ordinary taxation.
The inbound-worker regime names no business income, and the 7% regime is a pension regime, not a regime for a company owner. The founder's own residence route, from the visa to the permit, is handled through our founder visa service; the digital-nomad and elective-residence visas are covered in separate guides.
Is there a wealth tax in Italy?
Not a general one in the provisions read. A resident pays IVIE (imposta sul valore degli immobili situati all'estero, tax on real estate abroad) at 1.06% of the value of real estate held abroad; it is not due where the amount does not exceed EUR 200 (Art. 19 D.L. 201/2011, text in force from 1 January 2024 to 31 December 2026).
IVAFE (imposta sul valore dei prodotti finanziari, dei conti correnti e dei libretti di risparmio detenuti all'estero, tax on financial assets abroad) is 2 per mille a year of the value of financial products held abroad by residents, 4 per mille from 2024 for products held in States with a privileged tax regime (Art. 19(20-bis)); bank accounts bear a fixed sum instead. For persons other than individuals the IVAFE is due up to EUR 14,000. IVIE follows the rules of IRPEF, IVAFE the rules of the income taxes (Art. 19(17) and (22)).
That is the Italian wealth tax picture for a resident. The commas of that article read for this guide impose no wealth tax on non-residents' assets, and a holder of the flat-tax option is exempt from both taxes and from the foreign-asset reporting duties (L. 232/2016 Art. 1(153), printed in the note to Art. 24-bis TUIR). Whether shares of an owner's foreign holding company count as IVAFE assets is left open here.
When are Italian returns and payments due, and who files them?
Paying tax in Italy for foreigners runs on the individual's calendar. The dates below are for tax year 2025, paid in 2026; the statutory rule sits beside each date so the table stays true for later years.
| What | Rule | 2026 date | Source |
|---|---|---|---|
| Online return | 15 April to 31 October of the following year; a Saturday term moves to the next working day | Monday 2 November 2026 (derived) | Art. 2(1) and (9) D.P.R. 322/1998 |
| Paper return at a post office | 15 April to 30 June | 30 June 2026 | Art. 2(1) D.P.R. 322/1998 |
| Balance and first advance | by 30 June, or within 30 days more with a 0.40% increase | 30 June 2026, or 30 July 2026 (derived); for taxpayers subject to the ISA (indici sintetici di affidabilità fiscale, tax reliability indices), 20 July 2026, or 20 August 2026 with 0.80% (Art. 6 D.L. 89/2026) | Agenzia delle Entrate; D.L. 89/2026 |
| Second or single advance | 30 November | 30 November 2026 | Agenzia delle Entrate |
| Flat-tax payment (option holders) | one sum by the date for the income-tax balance | with the balance | Art. 24-bis TUIR |
| Consolidated income-tax text | in force the day after publication | 4 July 2026 (derived) | D.Lgs. 117/2026 |
Sources: D.P.R. 322/1998, Art. 2 (Normattiva); Agenzia delle Entrate, income taxes page; TUIR, Art. 24-bis; D.Lgs. 117/2026.
The return is filed by the taxpayer, or by an intermediary on the closed list of Art. 3(3) D.P.R. 322/1998, whose first category is the registered dottori commercialisti, ragionieri e periti commerciali and consulenti del lavoro. FormaItalia is not on that list and does not transmit returns. Whether a non-resident whose only Italian income bears a final withholding must still file is not settled by the sources this guide relies on. D.P.R. 322/1998 is cited as in force in 2026. The company's own returns are covered in the tax-return guide linked at the foot of this page.
Which figures in the statute and on official pages are not the ones that apply?
A reader who opens Normattiva or the Agenzia's pages meets figures that do not apply. This guide uses two words for them: "printed" and "operative".
- Art. 27(3) D.P.R. 600/1973 prints 27% on dividends; operative: 26%.
- Art. 26(5) prints 12.50% on interest; operative: 26%.
- Art. 27-bis(1) prints a 20% holding; operative: 10%.
- Art. 16(1) D.Lgs. 446/1997 prints 3.50% IRAP; operative: 3.9%.
- The Agenzia's English new-residents page prints EUR 100,000; Art. 24-bis prints EUR 300,000.
- The Agenzia's Italian page calls the ruling optional; the statute puts it first.
From our practice: the file a foreign owner brings before the registration
A worked example built from the rules on this page, not a client case. A founder living abroad holds all the quotas of a Milan S.r.l. and plans to move to Italy. While non-resident, a dividend to them bears 26% final (Art. 27(3)); once resident, 26% final under Art. 27(1); and the flat tax, if opted for after a favourable ruling, does not cover it, the dividend being Italian-source.
On such a file we ask for where the owner will be resident for the year, the certificate of tax residence of their own State, for a move the documents proving non-residence in nine of the previous ten tax periods, and the codice fiscale. We check them against the rules above and coordinate with the intermediary who files.
What changes after 2026?
D.Lgs. 117/2026 approves a consolidated income-tax text, in force from 4 July 2026 (Normattiva). Normattiva prints every TUIR article cited here, and Arts. 25, 26, 26-quater, 27 and 27-bis D.P.R. 600/1973, as valid to 31 December 2026, and the Ministry's documentation database marks the consolidated text in force from 1 January 2027; the successor numbers are not stated here. The one 2027 figure this guide gives: IRES stays at 24% in the consolidated text.
D.Lgs. 141/2026 approves a consolidated text on filings and assessment; its application date and repeals are not stated here, so D.P.R. 322/1998 is cited as in force in 2026. This guide is re-read in January 2027 and prints no 2027 article number.
Sources
- TUIR (D.P.R. 917/1986), Art. 2: taxpayers and the residence test (Normattiva, text as in force in 2026)
- TUIR, Art. 3: the tax base of residents and non-residents (Normattiva, text as in force in 2026)
- TUIR, Art. 23: income produced in Italy (Normattiva, text as in force in 2026)
- TUIR, Art. 11: the IRPEF brackets (Normattiva, text as in force in 2026)
- Imposta sui redditi delle società (IRES) (Agenzia delle Entrate)
- D.P.R. 600/1973, Art. 27: withholding on dividends (Normattiva, text as in force in 2026)
- D.P.R. 600/1973, Art. 27-bis: the Parent-Subsidiary route (Normattiva, text as in force in 2026)
- S.I. 1990/2590: the Order giving effect to the UK-Italy Convention (legislation.gov.uk)
- TUIR, Art. 169: the TUIR and double-tax agreements (Normattiva, text as in force in 2026)
- Attestato di residenza fiscale: what it is (Agenzia delle Entrate)
- TUIR, Art. 24-bis: the flat tax for new residents (Normattiva, text as in force in 2026)
- D.Lgs. 117/2026: the consolidated income-tax text (Normattiva)
Also cited, by name: TUIR, Arts. 24, 24-ter, 50 and 68; D.P.R. 600/1973, Arts. 25, 26 and 26-quater; D.L. 66/2014, Art. 3; D.L. 38/2026, Art. 11; D.Lgs. 360/1998, Art. 1; D.Lgs. 446/1997, Art. 16; D.L. 201/2011, Art. 19; D.P.R. 322/1998, Arts. 2 and 3; D.Lgs. 141/2026; the Agenzia delle Entrate's pages on IRAP 2026, the inbound-worker regime, income-tax payments, the new-residents regime (English and Italian) and Brexit; the Ministry of Economy and Finance's documentation database. Sources read on 9 October 2026.
Frequently asked questions
Do I pay Italian income tax if I only own an Italian company?
Not through IRPEF on a dividend under a final withholding. A non-resident pays IRPEF only on income produced in Italy (Art. 3(1) TUIR), and income bearing a final withholding is outside the IRPEF base (Art. 3(3)(a)). The company itself pays IRES at 24%, a separate tax, and withholds 26% on a dividend paid to a non-resident.
How does Italy decide whether I am tax resident?
Under Art. 2(2) TUIR, a person is resident for the year if, for most of the tax period and counting fractions of a day, they have civil-code residence, domicile or presence in Italy. Domicile is where personal and family relations mainly develop. The article prints no number of days, and any one of the three links is enough.
Does registering my address in Italy make me resident?
Registration in the municipal population register for most of the tax period raises a presumption of residence, which the person may rebut with proof. Under the text of Art. 2(2) TUIR applying from 1 January 2024, it is a presumption in a sentence of its own, not a criterion beside residence, domicile and presence.
Do US citizens pay taxes in Italy?
Italian income tax follows residence, not the passport. The residence test of Art. 2(2) TUIR names no nationality, and the only citizenship rule in the article concerns Italian citizens who cancel their registration and move abroad. What the United States charges its own citizens is outside Italian law and is not covered on this page.
Do tourists pay tax in Italy?
For income tax, a person who is not resident in Italy is taxed only on income produced in Italy (Art. 3(1) TUIR), so their foreign income stays outside IRPEF unless they become resident under Art. 2(2). Taxes paid on purchases and the tourist-stay tax are separate matters and are not covered on this page.
What are the Italian income tax rates for 2026?
Under Art. 11(1) TUIR, in the text in force from 1 January to 31 December 2026, IRPEF is 23% on income up to EUR 28,000, 33% above EUR 28,000 up to EUR 50,000 and 43% above EUR 50,000. Regional and municipal surtaxes are due on top and depend on the place of tax domicile.
What are the regional and municipal surtaxes?
They are additions to IRPEF. The municipal surtax goes to the municipality of tax domicile on 1 January and is paid with the IRPEF balance; the municipality may vary its rate by no more than 0.8 percentage points in total (Art. 1 D.Lgs. 360/1998). The 2026 base and regional percentages are not stated in this guide.
What does Italy withhold on a dividend paid to a foreign owner?
26% final for a non-resident, refundable up to 11/26 where tax was paid abroad on the same profits; 1.20% final for a company in an EU or listed EEA State. An EU parent meeting Art. 27-bis (10% for one year, among other conditions) gets a refund on request, or non-application at source if the payer holds the documents by payment.
And on interest, royalties and fees?
Interest bears 26% final, royalties 30% final on the taxable part, and fees for self-employment-type services performed in Italy 30% final. A treaty may cap them: the UK-Italy Convention sets 10% on interest and 8% on royalties. Art. 169(1) TUIR says the TUIR applies where more favourable to the taxpayer, also in derogation from such agreements.
Is a share sale by a foreign owner taxed in Italy?
Gains on shares of Italian-resident companies are Italian-source income (Art. 23 TUIR). A treaty may leave the tax to the seller's State: UK-Italy Convention Art. 13(4), with the five-year rule of Art. 13(5). A qualifying EU or EEA company counts 5% of a qualifying gain; an individual's gain bears a 26% substitute tax. The filing procedure is not covered here.
What is the flat tax for new residents, and do I need a ruling first?
An individual who moves to Italy after at least nine non-resident tax periods within the previous ten may opt for EUR 300,000 a year on foreign-source income, plus EUR 50,000 per family member, for up to fifteen years (Art. 24-bis TUIR). The statute puts a favourable answer to a ruling request first, before the option.
Does the flat tax cover my Italian company's dividends?
No. The regime covers foreign-source income, and a dividend paid by an Italian company is Italian-source income under Art. 23 TUIR, so it stays outside the flat tax. Gains on qualified holdings realised in the first five tax periods of the option also stay under ordinary taxation (Art. 24-bis TUIR).
Is there a wealth tax in Italy?
Not a general one in the provisions read. Residents pay IVIE at 1.06% of real estate value abroad and IVAFE at 2 per mille a year of financial products abroad, 4 per mille in privileged-tax States (Art. 19 D.L. 201/2011). A flat-tax option holder is exempt from both (L. 232/2016 Art. 1(153)); the commas read impose neither on non-residents.
Is the 2026 rule going to change in 2027?
The numbering will. D.Lgs. 117/2026, in force from 4 July 2026, approves a consolidated income-tax text, and the TUIR articles cited here print validity to 31 December 2026. The successor article numbers are not stated in this guide; IRES stays at 24% in the consolidated text. The guide is re-read in January 2027.
Who qualifies for the inbound-worker regime?
Per the Agenzia on Art. 5 D.Lgs. 209/2023: workers who move tax residence from tax year 2024, were non-resident for the three prior periods, commit to four years, work mostly in Italy and are highly qualified or specialised. Employment-type and professional income counts for 50% (40% with a minor child), up to EUR 600,000 yearly, for five years from the move.
The paid step. The owner's Italian tax position reviewed before the registration: Tax Advisory in Italy for Foreign-Owned Companies.
The calendar. The company's and the founder's returns, year by year: Tax Returns in Italy for the Company and the Founder.
The investor route. Residence through a qualifying investment: Golden Visa Italy and the Investor Visa Route.
Related pages
- Accounting Firm in Italy for Foreign-Owned Companies
- Italian Tax Residency Certificate and Treaty Relief
- Tax Returns in Italy for the Company and the Founder
- Tax Advisory in Italy for Foreign-Owned Companies
- Founder Visa for Italy and the Residence Route that Fits Your Company
- Golden Visa Italy and the Investor Visa Route