Italy has approved its new Budget Law for 2026 (No. 199/2025), published in the Gazzetta Ufficiale. This regulation introduces a set of tax measures that reorganize the incentive system and adjust certain elements of the corporate and labor tax burden for the 2026-2028 period.
The reform combines fiscal stability with a selective reinforcement of competitiveness: it maintains ordinary tax rates, avoiding generalized increases in corporate taxation. At the same time, it reorganizes the instruments for supporting productive investment, digitalization, and innovation. The central axis of the reform is the rationalization of the Italian incentive system.
Review of Corporate Income Tax (IRES)
The 2026 Budget Law maintains the nominal IRES rate and introduces adjustments aimed at strengthening business investment through hyper-depreciation mechanisms. These are applicable to certain strategic tangible and intangible assets. The incentive is articulated through higher tax deductions on eligible investments. Its function is to favor productive modernization and business capitalization without altering the ordinary tax rate.
Incentives for energy transition and innovation
The regulation partially reconfigures previous tax credit regimes toward a more selective system based on enhanced deductions for investments in advanced capital goods. Access to these benefits requires compliance with specific technical requirements and rigorous supporting documentation. Institutions, therefore, are increasing control mechanisms and the traceability of investments.
Rationalization of tax expenditure on employment and corporate welfare
The law reorganizes the incentives linked to labor costs. Now the reform includes adjustments to IRPEF, measures relating to the “tax wedge”, and stimuli for productivity and corporate social benefits. The objective is to increase the net salary of workers without significantly raising business costs.
Conclusion
Overall, these measures reflect an incentive system that is more selective and oriented toward real economic results. This forces international companies to review their investment strategies, profit distribution policies, and tax compliance processes in Italy.
If you are interested in maintaining proper and correct management of your tax obligations in Italy, contact our experts to achieve a successful international expansion.
At Auxadi, we offer comprehensive services in accounting, tax, payroll, transfer pricing and corporate legal services to multinationals and funds. With experience since 1979 and a presence in over 50 countries, including 26 proprietary subsidiaries, our advanced technological platform, MySPV, and proven methodology enable us to guarantee efficient management in compliance with local regulations.
Author:
Jessica Paola Hernández
Accounting Manager – IT
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