Italy’s 2026 draft budget introduces a new three-year tax credit for businesses in SEZs, extends plastic and sugar tax exemptions until 2026, allocates EUR 100 million for SLZs, and refinances the Nuova Sabatini incentive. 

Italy’s Council of Ministers approved the draft state budget for 2026 and the multi-year budget for 2026-2028 on 17 October 2025.

This follows after Italy’s Ministry of Finance presented the draft Budget Plan for 2026-2028 to the Council of Ministers on 14 October 2025.

The bill allocates an average annual intervention of around EUR 18 billion and introduces a mix of business incentives, sectoral contributions, and taxpayer relief measures aimed at supporting growth and fiscal stability.

Tax credit for businesses in SEZs

One key tax measure includes a new tax credit for companies operating in special economic zones (SEZs) for a three-year period, along with EUR 100 million allocated to support simplified logistics zones (SLZs) from 2026 to 2028.

Banks

The contribution of the financial sector has been confirmed, with the involvement of banks and insurance companies. Among the measures is the extension of the deferral of deductions related to write-downs and losses on loans, as well as the cost of goodwill, associated with the recognition of deferred tax assets (DTAs). A reduced tax rate will be applied to profits allocated to equity that are released and distributed. The IRAP rate has been modified, and the partial deductibility of ACE losses and surpluses has been confirmed.

Tax settlement

New tax settlement measures allow taxpayers to clear outstanding payments assigned to the tax collection agency up to 31 December 2023. Eligible taxpayers—those who have filed their tax returns but not made the required payments—can settle their dues either in a single payment or over nine years through 54 equal bimonthly instalments. Local authorities may also opt to participate in this scheme.

Additional measures

The 2026 draft budget extends the exemption from the plastic and sugar taxes until 31 December 2026, and provides additional funding for the “Nuova Sabatini” incentive program.

Personal income tax rate reduction

The second IRPEF (personal income tax) rate will be reduced from the current 35% to 33%. This reduction will be eliminated for incomes above EUR 200,000.