When establishing a company in Italy, the income tax system is progressive, with different rates applying based on earnings. Under the standard tax system, your income will be taxed in three tiers:
- Income up to €28,000 is taxed at 23%;
- Income between €28,001 and €55,000 is taxed at 35%;
- Income exceeding €55,001 is taxed at 43%.
Opting for the standard tax regime provides the opportunity for reimbursement of certain expenses upon filing a tax return. Moreover, you can benefit from Italy’s self-employed tax credit, a significant advantage for those running their own business.
Self-employed workers in Italy who choose the standard tax system can also take advantage of a special tax regime aimed at workers relocating to the country, known as the lavoratori impatriati scheme. Under this program, individuals are required to pay tax on only 30% of their income during their first five years of residency. In some regions of Italy, a reduced rate of 10% may apply.
This taxation framework is designed to support both local entrepreneurs and foreign professionals moving to Italy, creating a favourable environment for businesses to thrive.
