Tax residency, taxes and the annual return

The point that decides everything: tax residency

Not citizenship, and not just the civil registry either. For Italy you are tax resident if, for the greater part of the tax year — that is, more than 183 days — at least one of these applies:

• you are registered in the resident population registry;
• you have your domicilio in Italy, meaning the place where your personal and family relations principally develop;
• you have your residenza under the civil code in Italy, that is, your habitual dwelling;
• you are physically present in Italy, counting fractions of days.

The definition was rewritten recently, shifting the centre of gravity from economic ties to personal and family ones, and turning registry enrolment into a rebuttable presumption rather than an absolute rule.

If you are tax resident in Italy, Italy taxes your income wherever it arises. If you are not, it taxes only Italian-source income.

The treaty with your country

When two countries claim the same taxpayer or the same income, the double taxation treaty steps in. It does two things:

1. Tie-breaker rules: if both States treat you as resident, the treaty decides which one you are resident in for its purposes, looking in order at permanent home, centre of vital interests, habitual abode and nationality.
2. Allocation of taxing rights by income type: employment, immovable property, dividends, interest, pensions. Some categories remain taxable in the source country, others only in the country of residence.

The residence country then eliminates double taxation through a foreign tax credit: tax paid abroad is offset against Italian tax, within limits.

Italy has treaties with almost every European country and with much of the rest of the world, but not with all of them: the current list is on the Department of Finance website. If your country has none, a credit for tax paid abroad is still possible under Italian law, but without the rules saying who gets to tax what: the risk of paying twice is higher.

What you pay: IRPEF

Personal income tax is progressive across three bands:

Taxable income	Rate
Up to €28,000	23%
€28,000 to €50,000	33%
Above €50,000	43%

The second rate fell from 35% to 33% under the 2026 budget law (law 199/2025), with effect from 1 January 2026. The benefit is neutralised above €200,000 of total income.

Two local surcharges are added:

• a regional surcharge, set by the region, roughly between 1.2% and 3.3%;
• a municipal surcharge, up to 0.9%.

There are then deductions and allowances reducing the tax: for employment or pension income, for dependants, for medical expenses above a franchise, for mortgage interest on your main home, for building works. The rates and ceilings of the building bonuses change almost every year.

Self-employed people with modest revenue can consider the regime forfettario, with a reduced substitute tax instead of IRPEF and surcharges, up to an annual revenue threshold.

The annual return

Form	Who uses it	When
730	Employees and pensioners	Deadline typically in September; any refund through payroll
Redditi Persone Fisiche	Anyone with foreign income or assets, VAT numbers, cases the 730 cannot handle	Deadline typically in October

Agenzia delle Entrate provides a pre-filled return in the logged-in area with SPID or CIE: it already contains medical expenses, mortgage interest and contributions. It still has to be checked and completed with everything the agency does not know — foreign income in particular.

Exact dates shift from year to year: check them on the agency's site.

If you hold anything abroad

This is the most frequent and most expensive mistake among people who move.

Anyone tax resident in Italy must complete quadro RW of the return, listing bank accounts, investments and property held abroad, even where they produce no income. Two wealth taxes apply to those assets:

• IVIE on property abroad;
• IVAFE on financial assets abroad.

Equivalent taxes paid in the country where the assets sit are generally creditable.

If you are moving for work

There is a favourable regime for inbound workers (impatriati) that exempts a substantial share of employment income earned in Italy for several years. The conditions were rewritten in 2024 and are now more selective: among other things, not having been resident in Italy in the preceding tax periods, a commitment to stay for some years, qualification or specialisation requirements, and performing the work mainly in Italy. There is a cap on the income covered.

It is worth a great deal of money and has detailed rules: check the requirements before you move your residence, because some conditions are assessed looking backwards.

The other taxes you will meet

• IMU on property other than your main non-luxury home.
• TARI, the municipal waste tax.
• Vehicle tax, regional, owed by the vehicle's owner.
• Registration tax on sales and leases.
• Stamp duty on Italian bank accounts and securities portfolios.

Payments go through the F24 form or pagoPA, almost always online.

Common mistakes

• Counting only days. Even under 183 days you can be resident if your family and centre of personal interests are here.
• Leaving your Italian registry entry open after leaving: it keeps generating a presumption of tax residency.
• Not declaring foreign accounts.
• Assuming a foreign pension is taxed only in Italy.
• Choosing a favourable regime after the move, when some requirements had to be verified beforehand.
• Ignoring the local surcharges when working out net income: they differ noticeably between municipalities.