Corporate Tax Rates for Companies in Italy

Two, and they are not one rate. IRES (imposta sul reddito delle società) is a State tax on the company's adjusted accounting profit. IRAP (imposta regionale sulle attività produttive) is a regional tax on a different base, the net value of production (valore della produzione netta). Both are collected by the Agenzia delle Entrate, the Italian Revenue Agency, and both are paid by form F24, the single payment form. The Agenzia delle Entrate is the body a reader may know elsewhere as the tax authority or "IRS".

Added together, the two statutory rates for an ordinary company are 24% plus 3.9%, which is 27.9%. That sum is arithmetic only. It is not a published effective rate and it is not a rate on accounting profit, because the two taxes are charged on different bases, as the Agenzia delle Entrate IRES page and the IRAP 2026 instructions show.

The IRES rate is 24%. Art. 77(1) TUIR, the income-tax code (testo unico delle imposte sui redditi, D.P.R. 917/1986), sets the tax on total net income at 24%, and Normattiva shows that text in force to 31 December 2026. The base starts from the income-statement result, adjusted by the TUIR rules (Art. 83(1) TUIR).

A resident S.r.l., S.p.A., S.a.p.a. or cooperative pays IRES on all its income, wherever it arises. A non-resident company pays only on income produced in Italy, as the Agenzia delle Entrate states. Losses carry forward without time limit and offset up to 80% of each later year's taxable income; the losses of the first three periods of a new productive activity offset the full taxable income (Art. 84 TUIR). Net interest expense is deductible up to 30% of the gross operating result, the risultato operativo lordo or ROL, plus ROL carried forward (Art. 96(2) TUIR). The Italian terms are glossed because they are the words on the return.

The reduced 20% rate was enacted for one tax period only: the period after the one in progress at 31 December 2024. For a company with a calendar financial year, that is FY2025. The Agenzia delle Entrate gives the rate on this basis, under L. 207/2024 Art. 1, paragraphs 436 to 444.

The rate was conditional on reinvestment and hiring: part of the profit set to a reserve and invested in qualifying assets in Italy, and no fall in headcount. This page does not state the full list of conditions, and it states nothing about 2026: the rate is described as enacted for FY2025 only.

IRAP is charged at an ordinary 3.9% of the net value of production. The base is the difference between the value and the costs of production, without staff costs, without certain items of the income statement listed in Art. 2425 of the Civil Code (items 10(c)-(d), 12 and 13) and without extraordinary items from transfers of a business, under Art. 5(1) D.Lgs. 446/1997. Art. 2425 is named here only as the list of base items. A company always pays IRAP, because its activity is in every case the taxable event, and that includes a year in which it makes a loss (Art. 2(1) D.Lgs. 446/1997). The total cost of employees on open-ended contracts is deductible from the base (Art. 11(4-octies) D.Lgs. 446/1997).

There is a printed-rate trap. The text of Art. 16(1) D.Lgs. 446/1997 on Normattiva, in force from 21 February 2026, still shows 3.50%. The reduction was repealed in 2014 and the text was not restored, so the rate the Agenzia delle Entrate applies, in its IRAP 2026 instructions, is 3.9%.

An Italian S.r.l. with its registered office in Italy pays IRES as a resident company, whoever runs it. Residence rests on three tests that are alternatives, each applied for most of the tax period (Art. 73(3) TUIR):

• the registered office (sede legale) is in Italy;
• the place of effective management (sede di direzione effettiva) is in Italy;
• the ordinary management is mainly in Italy (gestione ordinaria in via principale).

A foreign holding of an Italian company is presumed Italian-resident (esterovestizione, a foreign residence that is not real) where it is controlled by Italian residents or run by a board mostly of Italian-resident directors, unless it proves otherwise (Art. 73(5-bis) TUIR). The firm explains the presumption in the esterovestizione guide. This page does not say where a company should be managed.

A foreign company with no Italian subsidiary pays IRES only on income produced in Italy. It pays IRAP only through a permanent establishment (stabile organizzazione), a base or an office active in a region for at least three months, under Art. 12(2) D.Lgs. 446/1997.

This is the mechanics, not a personal calculation. If taxable income equals EUR 100,000 after the TUIR adjustments, IRES at 24% is EUR 24,000. IRAP is 3.9% of a different base, the net value of production, so it cannot be read off the profit. A share of the IRAP then comes off the IRES base: a flat 10% of IRAP, plus the IRAP on the taxable share of staff costs (Art. 6 D.L. 185/2008). The source the research reused marks that rule in force only to 31 December 2026. No total is given, because the second base is the company's own.

For a company with a calendar financial year, the Redditi SC return and the IRAP return are due by the last day of the tenth month after year end. For FY2025 that is 2 November 2026, because 31 October 2026 falls on a Saturday, as the Agenzia delle Entrate Redditi SC page states. The balance of IRES and IRAP and the first advance (acconto) fall due on 30 June, or 30 days later with 0.40% interest. The second advance is due on 30 November, at 60% of the prior-year amount, or 50% for taxpayers under the ISA tax-reliability indices. The Agenzia delle Entrate payments page sets these dates.

The company or an authorised intermediary files and pays: the transmission of the return is open only to the intermediaries listed in Art. 3(3) D.P.R. 322/1998, and the firm prepares the return and coordinates, but does not transmit it. Filing and paying online need SPID, CIE, CNS or Entratel credentials, which a foreign director usually lacks. The calendar and the return are set out in corporate tax filing in Italy.

The tax calendar of a calendar-year company in 2026, with who acts at each date.

Source line: Agenzia delle Entrate, as at 9 October 2026. The annual charge on the corporate books is a separate yearly cost and not a tax on profit.

The Italian S.r.l. is the withholding agent: it keeps the tax when it pays the dividend. Under Art. 27 D.P.R. 600/1973 the default is 26% final on a dividend to a non-resident shareholder, and 1.20% for an EU/EEA company, from 1 January 2026. The printed 27% and 20% in the statute text are relics and are not used here. Under Art. 27-bis D.P.R. 600/1973 there is no withholding for an EU parent that holds at least 10% without interruption for at least one year, with the foreign tax authority's certificate in hand by the payment date.

These texts end on 31 December 2026 on Normattiva. The sources read do not say whether the certificate needs an apostille or a sworn translation, so this page says nothing on that point. The S.r.l. dividends tax in Italy guide works through the rate, and our guide to the tax residence certificate covers the related residence certificate. For a US shareholder, what the treaty protects a US shareholder from is set out separately.

What leaves Italy with the profits in 2026, and what an Italian company receives.

Source line: Normattiva, as at 9 October 2026; the D.P.R. 600/1973 texts end on 31 December 2026.

A new income-tax code replaces the TUIR. D.Lgs. 19 June 2026 n. 117, published in the Gazzetta Ufficiale n. 152 of 3 July 2026 (supplement no. 26), has been in force since 4 July 2026, and its Title II, Arts. 81 to 159, is the IRES. Normattiva shows Art. 77 TUIR, the article that sets the 24%, as repealed from 1 January 2027. Arts. 24-ter, 73, 87, 89 and 162 TUIR are likewise marked in force only to 31 December 2026, while Art. 16 D.Lgs. 446/1997 on IRAP carries no end date.

This page states the 2026 law with its end date. It does not say that the 24% continues, because the code's application date and rate article were not read, and it prints no article number of the new code.

No. For a company, the income tax is IRES, at the rate above. The personal income tax is a different tax, and this page gives none of its rates. A search for the Italy tax rate, Italy tax rates or the income tax rate in Italy often means the personal tax. The Italy income tax rate for a person, and the Italy income tax rates by bracket, belong to that tax, and this page gives none of them.

Two other names cause confusion. The "7% rule" is an individual's regime: a pensioner who moves to a qualifying small southern municipality pays a 7% substitute tax on foreign income (Art. 24-ter TUIR). It is not a company rate. Pillar Two, the global minimum tax, applies to groups with consolidated revenue of EUR 750 million or more in at least two of the four previous years (Art. 10(1) D.Lgs. 209/2023); an ordinary S.r.l. of a founder is outside it. A company's crypto gains are a separate question, covered in how crypto gains are taxed in Italy.

• planning IRES and IRAP for a company run from abroad: the tax advice behind the rates on this page, prepared with the founder.
• corporate tax filing in Italy: the calendar and the return, prepared by the firm and transmitted by the company or an authorised intermediary.

Questions on a particular company go through our contact page.