The reform reduces tax burdens, improves legal certainty, implements OECD BEPS Pillar Two and seeks to attract foreign investment.
Italy has published Law No. 120 of 8 August 2025 in the Official Gazette No. 184 of 9 August 2025, announcing the extension of the deadline for implementation of the general tax reform outlined in Law No. 111 of 9 August 2023 to 29 August 2026.
Law No. 111 establishes a framework of principles and regulations enabling the Italian government to execute a comprehensive overhaul of the Italian tax system (Enabling Law). The Law took effect on 29 August 2023.
Law No. 111 aims to reduce tax burdens for corporations and individuals, enhance legal clarity, minimise litigation, and promote more effective relationships between tax authorities and taxpayers. It also aligns with the OECD’s BEPS project and implements Pillar Two GloBe rules, effective from 1 January 2024, to attract foreign investment.
The deadline for adopting legislative decrees with supplementary and corrective provisions has been extended to 29 August 2028, and the consolidated versions of new tax codes, aimed at reorganising tax provisions, are to be completed by 31 December 2026.
Law No. 120 entered into force on 24 August 2025.
Earlier, Italy’s Council of Ministers approved a Legislative Decree on 4 June 2025, introducing supplementary and corrective measures to the recent tax reform. These measures address compliance, litigation, penalties, and the two-year preventive composition procedure (CPB). The decree was based on Law No. 111.
