Italian corporate taxation is split between a national tax and a regional one with its own base and rate. What the split means for companies operating across more than one Italian region.
- IRAP regional variation
- TFR accrual and annual revaluation
- How does IRAP work alongside IRES?
The single most distinctive feature of the Italian employment system is TFR (Trattamento di Fine Rapporto) — a deferred severance payment that accrues for every employee throughout their tenure and is owed in full regardless of why employment ends. No comparable mechanism exists in Switzerland, Germany, France, Spain or Portugal, and it changes total employment cost modelling materially.
What a company pays in Italy. Every figure below is published on the Italy country page.
| Italy | |
|---|---|
| Corporate tax rate | 24% IRES + 3.9% IRAP (combined ~27.9%, IRAP variable ±0.92pp by region) |
| VAT standard rate | 22% |
| VAT reduced rates | 10% and 5%, with a super-reduced 4% |
| Accounting standard | Italian GAAP (OIC) or IFRS for listed/large groups |
| EU Blue Card threshold | ~€36,300/year standard · ~€28,000–29,000/year shortage occupations (2026) |
What makes it complex in Italy
- IRAP regional variation — of up to 0.92 percentage points, requiring tax base allocation across regions for multi-location companies.
- TFR accrual and annual revaluation — a deferred liability requiring continuous calculation (1.5% fixed + 75% of ISTAT inflation) for every employee.
How does IRAP work alongside IRES?
IRES is Italy's national corporate income tax at 24%. IRAP is a separate regional production tax, standard rate 3.9%, which regions can adjust by up to 0.92 percentage points. Companies operating across multiple regions must allocate their IRAP taxable base accordingly, generally based on personnel costs by location.
IRAP regional variation is one of the points HTLC Network handles for clients operating in Italy, within a single engagement that covers every other country they operate in — executed locally, governed centrally.
In Italy the scope is: Statutory accounts, VAT (IVA) returns, IRES/IRAP filings, and compliance aligned with the Redditi SC return.
See Accounting & Tax Compliance in Italy for the full scope, or the Italy country page for the statutory framework across every service.
Figures as published on the HTLC Network country pages, reviewed September 2026 and collected from public sources. They are not a substitute for advice on a specific case and should be verified before being relied on.