Italy Capital Gains Tax Guide 2026 — Stocks (26%), Bonds (12.5%), Crypto (33%)

Overview of Capital Gains Taxation in Italy

Italy distinguishes between two categories of capital income: capital gains (plusvalenze) — profits from the sale of financial assets, and capital income (redditi da capitale) — recurring income from financial assets (dividends, interest). While capital income is generally subject to a final withholding tax (see Investment Income guide), capital gains on most financial assets are subject to a substitute tax (imposta sostitutiva) at flat rates that vary by asset type. Gains are generally calculated on a realised basis — tax is triggered only when the asset is sold, not on unrealised appreciation.

Capital Gains Tax Rates by Asset Type (2026)

Italy applies different flat rates depending on the underlying nature of the asset:

Standard Rate — 26%: Applies to capital gains from: shares and equity securities (azioni) in Italian and foreign companies, ETFs (exchange-traded funds) — both accumulating and distributing, UCITS mutual funds, derivatives (options, futures, swaps, CFDs), bonds and debentures issued by companies (corporate bonds), convertible bonds, and preferred shares. This is the general default rate for most financial assets not subject to a reduced rate.

Reduced Rate — 12.5%: Applies to capital gains from: Italian government bonds (BOT, BTP, CCT, CTZ and other sovereign debt securities — titoli di Stato), bonds issued by Italian local authorities (regioni, province, comuni), bonds issued by supranational organisations (EU, EIB, etc.) where Italy has legislated preferential treatment, and certain qualifying savings certificates (libretti di risparmio) and postal bonds (buoni fruttiferi postali).

Higher Rate — 33%: Applies to capital gains from cryptocurrencies and virtual currencies (including Bitcoin, Ethereum, and other digital assets) where the gain exceeds €2,000 in a tax year. Gains below €2,000 from crypto are tax-exempt. This higher rate reflects the Italian government's policy to disincentivise speculative crypto trading. Losses from crypto can be offset against future crypto gains within the same tax year (carried forward for up to 5 years).

How Capital Gains Are Calculated

For most financial assets, capital gains are calculated as the difference between the sale proceeds (corrispettivo di vendita) and the acquisition cost (costo di acquisto), adjusted for transaction costs (commissioni, bolli, spese). The specific calculation depends on the asset class:

Shares and ETFs: Gains use the average cost method (costo medio ponderato) for identical assets held in the same securities account. When you purchase the same security at different times, the cost base is the weighted average of all purchases. For example, if you buy 100 shares at €10 and another 100 shares at €12, the average cost is €11 per share. If you then sell 50 shares at €15, the gain is 50 × (€15 — €11) = €200. Losses from one position can offset gains from another position within the same tax year (compensazione). Unused losses can be carried forward for up to 5 years but can only offset gains of the same type (e.g., 26% losses offset 26% gains, 12.5% losses offset 12.5% gains).

Government Bonds (BTPs, BOTs): Gains are calculated as the difference between the sale price (or redemption value at maturity) and the purchase price, plus any accrued interest not captured by the coupon payment. The reduced 12.5% rate applies to both interest income and capital gains on Italian government bonds. If you hold the bond to maturity, the capital gain is simply the difference between the purchase price and the face value (par).

Cryptocurrencies: For crypto transactions, the gain is calculated as the difference between the sale value in euros (or the fair market value at the time of disposal) and the acquisition cost. Each crypto asset is treated separately (not pooled like securities). Disposals include: selling crypto for fiat currency (EUR, USD), exchanging one crypto for another (e.g., BTC for ETH — treated as a taxable disposal of BTC and acquisition of ETH), using crypto to purchase goods or services (treated as a sale at fair market value), and gifting crypto (treated as a disposal at market value unless the gift is to a close family member and under a certain threshold). Mining income is treated as other income (reddito diverso) subject to 33% tax on the fair market value of the mined coins at receipt.

PIR — Piano Individuale di Risparmio

PIR (Piani Individuali di Risparmio) are tax-advantaged investment accounts designed to encourage long-term investment in Italian and European SMEs. Key features:

Tax Exemptions: Capital gains and other investment income generated within a PIR account are completely exempt from the 26% substitute tax, provided the investment is held for at least 5 years and the account complies with all PIR rules. This makes PIRs highly attractive for Italian resident investors with a medium- to long-term horizon. There is no annual contribution limit (the investment limit is €30,000 per year with a maximum total investment of €300,000 — though these limits have been adjusted in recent legislative changes). PIR investments must be allocated at least 70% to qualifying instruments (primarily shares or bonds of Italian or EU companies with permanent establishments in Italy, with sub-limits for SMEs).

Post-5-Year Tax Treatment: After the 5-year holding period, all accumulated gains within the PIR become permanently tax-free. Withdrawals before 5 years trigger recapture of the tax benefits (26% tax on all gains within the account, plus interest and penalties). The PIR regime applies only to Italian tax residents. Non-residents cannot open a PIR.

Foreign Accounts: Tax Monitoring and Wealth Tax

Italian residents holding financial assets abroad must report them on the Quadro RM section of the Modello Redditi PF form. The reporting obligation covers securities accounts, bank accounts, and other financial assets held outside Italy. The RW reporting requires disclosure of the year-end value and the maximum value during the year for each foreign account or investment. The penalties for non-reporting are severe (3-15% of the undeclared asset value per year). In addition to reporting, foreign financial assets are subject to IVAFE at 0.2% per year (€34.20 fixed for bank accounts exceeding €5,000 average balance). The IVAFE is creditable against any similar wealth tax paid in the foreign country.

FAQs

Is there an allowance for capital gains?

No, there is no general annual allowance for capital gains on securities. Every realised gain is taxable at the applicable rate (26%, 12.5%, or 33%). However, gains from cryptocurrencies are exempt if the total gain in a tax year is under €2,000. There is also no annual exemption for small share disposals (unlike the UK's CGT allowance). If you sell shares and make a gain of even €1, you owe 26% tax on that gain (through the intermediary's imposta sostitutiva collection mechanism). Losses can offset gains within the same tax year, and unused losses can be carried forward for up to 5 years, but only against gains of the same type (same tax rate category).

How is tax collected on capital gains?

For assets held with an Italian financial intermediary (banca, SIM, post office), the intermediary acts as a sostituto d'imposta — it applies the substitute tax directly on realised gains and remits it to the tax authority. No action is required from the taxpayer. For assets held with a foreign intermediary (non-Italian broker or bank), the taxpayer must self-declare the gains on the Modello Redditi PF (Quadro RT for capital gains) and pay the tax directly. The substitute tax is calculated and paid as part of the annual tax return. If the taxpayer has an Italian intermediary, any tax due on foreign-held assets is calculated separately and paid via F24.

What happens with losses?

Capital losses on shares, ETFs, and derivatives can offset capital gains of the same type (26% category) within the same tax year. Unused losses can be carried forward for up to 5 years and used against future gains of the same type. Losses on government bonds (12.5% category) can offset gains on government bonds only. Crypto losses can offset current and future crypto gains (carry forward up to 5 years). Losses cannot offset gains across different rate categories (e.g., a 26% loss cannot offset a 12.5% gain). Losses can only be used if the assets are held in an amministrato (managed) account with an Italian intermediary or declared on the tax return for foreign-held assets.

Disclaimer

This guide is for informational purposes only and does not constitute tax advice. Italian capital gains tax law is complex and subject to frequent change. Consult a qualified commercialista or tax advisor for advice specific to your situation. Rates and thresholds for 2026 are based on legislation enacted by June 2026.