Italian IRPEF is personal income tax, paid by both employees (deducted from wages) and the self-employed (paying after annual tax return).
Article Published: 09 Feb, 2021, Updated: 23 Apr, 2023 under Income Tax Return

IRPEF is personal income tax in Italy.

It is paid by both employees and the self-employed. Employees have it deducted from their wage-packets by their employer, while self-employed need to pay it after submitting their annual tax return. It is payable on different types of income, for example on rental income or occasional work.

IRPEF is a progressive type of taxation on income brackets with increasing rates. Tax rates start at 23% for the first 15.000 Euros of income and rise to 43% for the portion of income above 75.000 Euros.

The total tax payable may be reduced if the taxpayer has had any expenses such as medical expenses, refurbishments, interests on mortgages, veterinary expenses and others. In order to claim these reductions, an annual tax return must be submitted.

The IRPEF taxable base may be reduced by 70% or even 90% for new residents of Italy who fulfill specific requirements and stay here for at least two years. This benefit lasts for five years, but may be increased by an additional five years in certain cases, when the taxpayer buys a house or has children.

The Deadlines for paying IRPEF are usually June of the following year and June and November for advance payments, if due. It is worth counting on Italian Tax experts ir order to keep up with IRPEF, IRAP and many other Italian taxes you should mind about, like dealing with regular VAT (see VAT registration).

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