Italy’s 2026 budget introduces higher taxes on the financial sector and wealthy foreign residents, modest consumer tax increases, and expanded business support, while also delivering personal income tax relief for middle-income earners.

RF Report

Italy’s government has gazetted Law No. 199 of 30 December 2025 on the State Budget for 2026.

The main tax measures include:

  • The financial sector will face higher taxation, with new levies on banks, insurers, and financial operators expected to generate EUR 5–6 billion in 2026. This includes doubling the Tobin Tax on financial transactions, raising the rate to 0.10% for trades on regulated markets and 0.20% for other transactions, with the increase projected to be around EUR 1 billion over three years.
  • To support economic growth, the government has allocated EUR 3.5 billion to assist struggling businesses and encourage technological innovation.
  • Consumer taxes will increase slightly, including a EUR 2 flat charge on parcels valued under EUR 150 imported from outside the EU, targeting low-value e-commerce shipments.
  • For short-term rentals, existing tax rates will remain unchanged at 21% for one property and 26% for two or more properties, following the government’s withdrawal of a proposed increase.
  • High-net-worth individuals relocating to Italy will face higher flat taxes from 2026. The annual substitute tax will rise from EUR 200,000 to EUR 300,000, while the charge for family members will double to EUR 50,000. Current participants in the regime will retain the existing rates.
  • Finally, personal income tax relief has been introduced, reducing the rate from 35% to 33% for taxpayers earning between EUR 28,000 and EUR 50,000, benefiting around one-third of taxpayers with an average annual saving of EUR 218.

Earlier, Italy’s government won a Senate confidence vote on 30 December 2025, approving its 2026 budget by 113 votes to 70. The budget now moves to the lower house for final approval before year-end, avoiding automatic spending and tax cuts that would otherwise apply in 2026.