Italy’s income tax landscape in 2026 is on track for increased simplicity and enhanced international appeal. Recent and expected reforms could make the Italian tax system more accommodating, especially for expatriates and foreign nationals—including US citizens—seeking fairer rates and specialized tax regimes. However, regional surcharges and tax complexities will still require diligent compliance.
Italian (IRPEF - Imposta sul Reddito delle Persone Fisiche) personal income tax rates have a history of high brackets, once topping out at 51% in the 1990s. Since the mid-2000s, the maximum national rate stabilized at 43%, with only those on the highest incomes affected. Reforms in 2024 and 2025 set the stage for change by merging brackets and easing the tax pressure on middle incomes, maintaining the 43% rate only for earnings above €50,000.
Looking ahead to 2026, preliminary policy announcements and reputable commentary indicate a further reshuffling of brackets:
The effective tax rate for residents of larger cities can approach 47%, thanks to added regional and municipal surcharges (addizionali regionali e comunali). These vary depending on your region and municipality but are an essential part of overall tax calculations in Italy.
The projected IRPEF brackets for 2026 look like this:
While this creates a gentler slope for middle incomes, the top bracket still kicks in for higher earners, who should factor in additional surcharges in their planning.
Italy’s approach to fiscal reform is characterized by careful, step-by-step changes. Major tax adjustments are usually introduced through the annual Budget Law (Manovra fiscale) and are shaped in consultation with the European Union’s fiscal oversight mechanisms, especially under the Stability and Growth Pact.
Key points:
Italy has proactively introduced new tax regimes for international talent, expatriates, and high-net-worth individuals:
US expats and other foreign nationals can leverage these regimes for significant tax relief—especially if they have considerable foreign-source income or are classified as “impatriates”. However, US citizens remain subject to worldwide taxation by the United States, so careful cross-border tax planning and attention to US-Italy tax treaty provisions is critical.
The thrust for 2026 is a simpler system with fewer brackets and better incentives for middle-income earners and international professionals. The Italian government continues to promote Italy as an attractive destination for investors and skilled expatriates by:
For high earners and those with both Italian and foreign income, the system will still present challenges—particularly in regions with higher surcharges or for individuals navigating US dual-filing obligations.
On balance, though, Italy is expected to become even more “expat-friendly” by 2026, emphasizing compliance, stability, and attractive incentives rather than radical, across-the-board tax cuts.
As Italy continues to modernize its tax code, leveraging digital tools for online Italian tax filing will become the simplest way to ensure compliance, maximize incentives, and take full advantage of favorable regimes for expats and foreign residents.
ItalianTaxes.com is your technology-driven solution for easy and compliant Italian tax filing. Whether you are a US expat, a non-resident landlord, or a recent arrival exploring incentives, our streamlined online platform simplifies every step—from accurate tax form completion to fast, secure filing and payment. Start planning now to position yourself for the coming changes in 2026 and file Italian taxes online with peace of mind.