Tax Guide 2026: The Essentials for Professionals and Businesses
Tax rules can feel complex, but the fundamentals are straightforward once you know what to look for. This guide explains the core elements of the tax system in 2026: the main taxes, the available regimes and how filing your return works. Italy operates a layered fiscal system in which income tax, value-added tax and social security contributions coexist and interact — each governed by its own rules, deadlines and administrative procedures. Whether you are a freelancer opening a partita IVA, a small business owner or a professional already operating on the market, having a clear picture of these obligations allows you to plan ahead, avoid penalties and make informed decisions throughout the year.
The Codice Fiscale
The Codice Fiscale is the Italian tax identification number. It is required for any administrative or financial step: opening a bank account, signing a contract, issuing or receiving invoices, filing a tax return.
It is issued free of charge at any Agenzia delle Entrate office on presentation of a valid ID document.
The Main Taxes
IRPEF — Personal Income Tax
IRPEF is the main tax on personal income. It is progressive: the more you earn, the higher the percentage you pay.
2026 tax brackets:
| Taxable income | Rate |
|---|---|
| Up to €28,000 | 23% |
| €28,001 to €50,000 | 35% |
| Above €50,000 | 43% |
Various deductions and tax credits can reduce the final amount owed (medical expenses, mortgage interest, dependent family members, etc.).
Substitute Tax for Flat-Rate Taxpayers
Freelancers on the regime forfettario do not pay IRPEF — instead they pay a flat substitute tax: 5% for the first 5 years, then 15% from year six onwards. Read the full guide to the flat-rate scheme.
The Two Main Tax Regimes for Professionals, Businesses and Companies
Forfettario (flat-rate) — for revenues up to €85,000 per year. Flat tax rate, no VAT on invoices, simplified bookkeeping. The right choice for most freelancers and self-employed professionals.
Ordinario (standard) — above the threshold or when you have significant deductible expenses. Full bookkeeping, VAT-registered, progressive IRPEF with full expense deduction.
Filing Your Tax Return
A tax return must be filed every year for the previous calendar year. The two main forms are:
- Modello 730 — simplified return for employees and pensioners. Deadline: 30 September.
- Modello Redditi PF — full return for self-employed workers and more complex situations. Deadline: 31 October (electronically).
The return can be submitted directly via the Agenzia delle Entrate portal or through an accountant.
Social Security Contributions
In addition to taxes, self-employed workers pay INPS contributions for pension and social security purposes:
- Gestione Separata INPS — for most freelancers without a dedicated professional fund: around 26% of net income
- Gestione Artigiani e Commercianti — for those running commercial or artisan businesses: approximately €4,600 per year in contributions up to an income of €18,800, after which rates between 24% and 26% apply on the excess.
Contributions are paid via F24 form at the scheduled deadlines.
VAT in Italy: How It Works
IVA (Imposta sul Valore Aggiunto) — known internationally as VAT — is an indirect tax applied to the sale of goods and the provision of services. It is collected by businesses and professionals on behalf of the State: in practical terms, the seller charges VAT on each invoice issued and then remits the balance to the tax authorities after deducting the VAT paid on their own purchases.
Italy applies three main VAT rates:
- 22% — the standard rate, applied to most goods and services.
- 10% — a reduced rate applied, for example, to certain food products, hotel accommodation and renovation work on residential properties.
- 4% — a super-reduced rate reserved for essential goods such as basic foodstuffs, books and newspapers, and social housing.
On every invoice, VAT must be shown separately from the taxable base (the net amount). The difference between the VAT charged on sales (output VAT) and the VAT paid on purchases (input VAT) determines whether the taxpayer has a balance to pay or a credit to carry forward.
Settlement of VAT is periodic. Small businesses and freelancers operating under the standard regime (regime ordinario) can choose between quarterly and monthly payments. Those who opt for quarterly settlement pay the outstanding balance by the 16th of the second month following the end of each quarter, plus an additional surcharge of 1% as a deferment charge. Monthly payers must settle by the 16th of the following month. All VAT payments are made using the F24 form, indicating the relevant tax code for the settlement period. It is worth noting that taxpayers under the regime forfettario are exempt from VAT obligations entirely: they do not charge VAT on their invoices, do not deduct input VAT and have no periodic settlement obligations.
Key Tax Deadlines to Remember
The Italian fiscal calendar follows a predictable annual rhythm, but missing a deadline — even by a few days — can trigger interest charges and administrative penalties. Below are the main dates that every professional and business owner should keep in mind.
IRPEF balance and advance payments — Income tax is not paid in a single instalment. Each year, taxpayers settle the balance for the previous year and pay two advance instalments towards the current year. The first advance payment (typically 40% of the total advances due) falls on 30 June, while the balance and the second advance payment (60%) are due on 30 November. Where income is expected to fall, it is possible to reduce the advance payments with a formal declaration of lower expected income.
Quarterly VAT deadlines — For quarterly VAT payers, the key payment dates are: 16 May (Q1), 20 August (Q2, with the August deadline postponed), 16 November (Q3) and 16 March of the following year (Q4 annual settlement). The annual VAT return (dichiarazione IVA) must be submitted electronically by the end of April each year.
Modello 730 — Employees and pensioners who use this simplified return must submit it by 30 September for the previous tax year. Tax credits and refunds from the 730 are applied directly to the payslip or pension payment.
Modello Redditi PF — Self-employed workers and those with more complex income situations use this form instead. The submission deadline is 31 October (electronically), with payment of the tax balance and first advance instalment due by 30 June (or 30 July with a 0.4% surcharge).
Ravvedimento operoso (voluntary self-correction) — If a deadline is missed or an error is discovered, Italian tax law allows taxpayers to regularise their position spontaneously before the tax authority intervenes. Penalties are significantly reduced the earlier the correction is made: from one-tenth of the minimum penalty within 30 days of the breach, to one-fifth if regularised within one year. Acting promptly is always considerably less costly than waiting for an official assessment.
Why Work with an Accountant
DIY tax management works for very simple situations — but one wrong regime, a missed deduction or a late payment can cost more than an accountant’s annual fee. A professional keeps everything on track and identifies savings you may not even be aware of.
Studio CITI snc has been advising professionals and businesses in Milan since 1984. Contact us for a consultation on your tax situation.
Read also: Opening a Partita IVA in 2026 · Tax Deadlines 2026 · Italy’s Flat-Rate Tax Scheme 2025
