Italy expat taxes: Guide for US citizens

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise US Inc. or its affiliates, and it is not intended as a substitute for obtaining business advice from a Certified Public Accountant (CPA) or tax lawyer

If you’re a US citizen living in Italy, you’ll need to consider Italy’s expat taxes, including personal income tax and property taxes.

Let’s take a look at everything you need to know about paying expat taxes in Italy, including your US tax liabilities and exactly how to file your taxes.

We'll also introduce the Wise account, which allows you to send, spend, and receive your money across the globe in over 40 currencies – all at the fair mid-market rate.

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Table of contents
How much tax do US expats pay in Italy? How to file taxes in Italy as a US expat: step by step Do I have to pay US taxes if I live in Italy? Need to pay your US taxes as an expat? Expecting a refund from the IRS, but you live abroad? Meet Wise

How much tax do US expats pay in Italy?

So, how much tax will you pay in Italy? As an expat, you’ll need to look into all your tax requirements, including how much you’ll pay in both Italy and the US.

You’ll need to consider your residency status and how to maximize Italy’s expat tax break benefits. Let’s take a closer look at paying taxes in Italy as a foreigner.

Income tax for expats living in Italy

You’ll pay a few different types of income tax in Italy, including personal income tax, regional income tax, and municipal income tax.

Personal income tax is a national tax paid in relation to how much you earn, with set bands and rates for different income levels.

Regional and municipal income taxes are levied on a local level. Regional tax typically ranges from 1.23% to 3.33% of taxable income, whereas municipal tax ranges from 0% to 0.9%.¹

Let’s take a look at the tax rates for expats in Italy in 2025. Speak to the Agenzia delle Entrate (Italian tax authority) to find out more about paying your taxes.

Taxable income	Rate
Up to 28,000 EUR	23%
28,001 to 50,000 EUR	35%
More than 50,000 EUR	43%²

Taxable income also works differently depending on whether you are considered an Italian tax resident or not. For residents, total income consists of income from all sources. You’ll need to include money earned in Italy and worldwide.

Non-residents will only be taxed on income earned in Italy. This is an important difference for expats and foreigners.²

Deductions & allowances for US expats

As an expat living in Italy, you may be able to qualify for some tax breaks. In some cases, you can deduct personal expenses like medical costs, insurance, tuition fees, and donations.

You can also get a personal exemption to reduce your taxable income. Many taxpayers will qualify for a standard allowance, which will raise their income threshold and bring down their tax bill.¹

US expats should make the most of the favorable tax treaty between the US and Italy. The totalisation agreement between both countries ensures expats won’t pay social security in both Italy and the US.¹

You may also qualify for an expat tax break in Italy if you meet certain criteria for your expatriation. For example, you’ll receive a 7% tax incentive to transfer your tax residency to a municipality with a population of less than 20,000 in southern Italy.³

Speak to a tax specialist to understand exactly what you can deduct from your total income in Italy.

Other taxes in Italy

You may need to pay a few other taxes in Italy, including Value-Added Tax (VAT), inheritance tax, gift tax, property tax, and social security.

You’ll pay property taxes for owning real estate in Italy, including Imposta Municipale Propria (IMU) and Tassa sui Servizi Indivisibili (TASI).

The rate you’ll pay will depend on the value of your property — and you’ll likely pay a combined rate for both taxes as part of your tax bill.

You’ll also pay VAT on goods and services sold in Italy. Known as Imposta sul Valore Aggiunto, the standard rate of VAT is 22%. This contrasts with the US, where you’ll usually pay only 6% to 9% in VAT.¹

In Italy, the social security tax rate is roughly 10% for employees or 30% for companies compared to 7.65% in the US.¹ Make sure to consider these taxes before moving abroad.

How to file taxes in Italy as a US expat: step by step

It’s important to understand exactly how to file your expat taxes in Italy. This can ensure you pay your tax bill on time and meet any legal requirements.

Here’s your step-by-step guide to filing taxes in Italy as a US expat — everything you need to know.

Determine your residency and requirements

First, you’ll need to work out your tax and residency status. This will determine how you file your taxes and how much tax you’ll need to pay.

You’ll qualify as an Italian resident if you meet one of the following criteria:
You’ve lived in the country for more than 183 days in a year You have a primary residence in Italy You’re registered as a resident in the Italian Civil Registry¹

💡 You may also need to apply for a codice fiscale before you can complete your tax return. This is a unique identification code that lets you open a bank account, pay your taxes, or conduct business in Italy.³

Collect your tax forms

Next, you’ll need to collect any key documents or forms for your tax return. Do your research to ensure you correctly report your income.

Common tax forms for foreigners in Italy include the Redditi PF and form 730, depending on the type of income you need to declare.

If you are an employee or retiree with income from employment, a pension, or another source, you’ll likely submit form 730.

Anyone else, including taxpayers who are not residents in Italy for tax purposes, will typically file the Redditi PF.⁴

You may also need to file a Modello F24 to pay certain income tax arrears, VAT, and social security contributions.¹ Speak to a tax specialist for more information about paying tax in Italy as a foreigner.

File your taxes before the deadline

You’ll need to file your taxes with the Agenzia delle Entrate. This is Italy’s main tax authority. You can file your tax return online yourself or with the help of a qualified tax professional.

You can also file via a Fiscal Support Centre (CAF). If you’re an employee, your tax will likely be deducted automatically at the source.

💡 Here are your key tax deadlines:
For form 730: by September 30 of the year following the tax year For form Redditi PF: by October 31 of the year following the tax year

The Agenzia delle Entrate can provide you with all the information, forms, and instructions you’ll need to file your taxes.⁴

Work with a commercialista

Finally, you may want to work with a commercialista. This is similar to an accountant or tax advisor in the US.

Your commercialista will support you through the tax filing process, ensuring you fill out all the right forms for your individual circumstances.

Paying tax as an expat can be a little complicated. You may earn income from multiple sources — and you’ll need to check if you can qualify for any tax breaks. Make sure to consult an expert for more information.

Do I have to pay US taxes if I live in Italy?

You’ll also need to consider your tax liabilities in the US. As a US citizen, you’ll need to file a tax return in the US, even if you live abroad.

Most Americans will file IRS Form 1040 to report foreign income in the US, including any salary, wages, interest, or rental income. You’ll also need to fill out some additional forms if you’re self-employed.⁵

If you have more than 10,000 USD in your foreign accounts at any point during the year, you’ll need to submit a Foreign Bank Account Report (FBAR) to the US treasury.⁶

Tax treaties between the US and Italy should prevent double taxation for expats. You can use Form 1116 to convert what you’ve paid in Italian taxes into a foreign tax credit in the US.

This can then be used to reduce your US tax liabilities — and it should mean you won’t be taxed in both countries.⁷

Look into all of your tax requirements ahead of time to ensure you don’t get slapped with a big fine by the US tax authorities.

Does Italy tax US social security benefits?

Italy may tax retirement income and US social security benefits. This will affect you if you plan on moving to Italy once you retire.

There are some agreements between the US and Italy to avoid double taxation. You’ll also need to look into how to make social security contributions if you plan to work in Italy.⁸

Need to pay your US taxes as an expat? Expecting a refund from the IRS, but you live abroad? Meet Wise

Paying for your US taxes or receiving a tax refund can be tricky — the payment options are often slow and costly, and this doesn’t get better when you’re not in the country and/or you manage different currencies.

Whether you’re a US expat, a resident alien, or you have a foreign business, Wise can be an excellent option. With a Wise account, you can either pay your taxes from abroad or receive your tax refund easily. And if you manage more than one currency, you’ll save a lot on exchange rate markups and conversion fees.

When you fill out your tax forms, use your Wise USD Account and routing number.

🎯 You can find them under “Account Details.” This will let you:
Use direct debit to pay your taxes straight from your Wise account, avoiding the fees from other payment methods offered by the IRS Set up a direct deposit, the fastest way to receive your tax refund, to your Wise USD account details

Wise has no subscription fees or minimum balance requirements, and you can set up an account in minutes⁹.

You can send, receive, hold, and spend your money in multiple currencies, always with the real exchange rate and with just a small and transparent fee¹⁰.

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Paying taxes as an expat can be a complicated process. You need to work out your personal income tax rate and understand any available tax breaks for expats in Italy.

Make sure to consider your tax liabilities in both the US and Italy — and work with a commercialista for dedicated support filing your taxes.

To pay your US or Italian taxes at the fair mid-market exchange rate, check out Wise.

Sources

1. Taxes for Expats - Tax guide for Americans in Italy
2. Agenzia delle Entrate - Personal income tax rates and calculation
3. Experts for Expats - Taxes in Italy for expats and non-residents (2025)
4. Agenzia della Entrate - How and when to file a tax return
5. Greenback Tax Services - What US expats need to know about taxes in Italy
6. My Expat Taxes - Your guide to US-Italy expat taxes
7. My Expat Taxes - What US expats need to know about foreign tax credit
8. NCESC - Is US social security taxed in Italy?
9. Eligibility claim is subject to verification of customers identity
10. Please see Terms of Use for your region or visit Wise Fees & Pricing for the most up to date pricing and fee information

Sources checked 06/05/2025