Italy has enacted Law No. 207 of 30 December 2024, outlining the 2025 State Budget along with the multi-year financial plan for 2025-2027. The Law took effect on 1 January 2025.

The key measures include:

Removal of the Italian revenue threshold for DST 

The 2025 budget removes the Italian revenue threshold for the 3% digital services tax (DST).

This follows after Italy’s Deputy Minister for the Economy, Maurizio Leo, announced on 16 October 2024 that the thresholds for Italy’s 3% digital services tax (DST) would be removed, which was introduced on 1 January 2020.

The DST applies to resident and non-resident service providers generating revenues of at least EUR 750 million and at least EUR 5.5 million from digital services in Italy. If the thresholds are eliminated, all digital service providers in Italy will come under the scope of DST.

After the Italian threshold has been eliminated, new DST payment requirements have been introduced, including a tax deposit of 30% of the previous year’s DST due by 30 November 2025, with the remaining balance payable by 16 May of the following year.

Corporate profit tax rate

A new 20% corporate profit tax rate has been introduced and applies to businesses reinvesting at least 80% of profits, with 30% directed to advanced technologies and sustainable development.

Cryptocurrency transactions tax rate increases

The tax rate on cryptocurrency transactions has been raised from 26% to 33%, and the EUR 2,000 exemption is removed from 1 January 2026.

A transitional rule allows taxpayers to revalue crypto holdings as of 1 January 2025 by paying an 18% substitute tax.

Extension of investment tax credits in the “Single ZES”

The tax credit for investments in the “Special Economic Zone for Southern Italy – Single ZES” has been extended to 2025.

Tax credit for consultancy costs

The tax credit for SMEs listing consultancy costs is extended to 2025, 2026, and 2027.