Italy Corporate Tax Calculator 2026 — IRES & IRAP
Calculate IRES (Imposta sul Reddito delle Società at 24%), IRAP (Imposta Regionale sulle Attività Produttive with regional rates), ACE notional deduction, and the interest deduction limitation (30% of ROL/EBITDA) for Italian companies.
How Italian corporate taxation works in 2026
Italian companies (S.p.A., S.r.l., etc.) pay IRES (Imposta sul Reddito delle Società) at a flat 24% rate on taxable profit, plus IRAP (Imposta Regionale sulle Attività Produttive) at rates between 3.9% and 4.97% depending on the region. The ACE (Aiuto alla Crescita Economica) provides a notional deduction of approximately 2.5% on new equity capital to encourage capitalization over debt financing. Interest costs are deductible up to 30% of ROL (Reddito Operativo Lordo, equivalent to EBITDA), with excess interest carried forward. IRAP is deductible for IRES purposes, and its tax base excludes personnel costs (salaries must be added back).
Italy Corporate Tax Calculator 2026 — IRES & IRAP
Free Italian corporate tax calculator. Calculate IRES (24%), IRAP with regional rates, ACE deduction, and interest deduction limits for Italian companies.
Calculation Breakdown
Tax Breakdown
Effective Tax Rate at Different Profit Levels
Understanding your results
IRES is a flat 24% corporate income tax applied to the taxable profit after adjusting for ACE, non-deductible interest, and the deductible portion of IRAP. IRAP is a regional production tax with a standard rate of 3.9% that varies by region (Lazio 4.82%, Campania 4.97%). The IRAP base starts from the net production value — personnel costs are not deductible for IRAP, so they are added back to the tax base. The ACE deduction incentivizes equity financing by allowing a notional return on new equity capital to be deducted from the IRES base, reducing the corporate tax burden for well-capitalized companies.
Interest deduction limitation (thin capitalization)
Italy applies an EBITDA-based interest limitation rule under EU ATAD (Anti-Tax Avoidance Directive). Interest costs are deductible up to 30% of ROL (EBITDA). Any excess interest costs are non-deductible in the current year but can be carried forward indefinitely. This rule applies to all Italian companies and effectively limits the tax benefit of debt financing, encouraging the use of equity capital alongside the ACE regime.
IRAP rates across Italian regions
The standard IRAP rate is 3.9%, but regions may increase or decrease it within limits. Lombardy, Veneto, Piedmont, and most northern regions apply the standard 3.9%. Lazio and several southern regions (Abruzzo, Molise, Apulia, Calabria) apply 4.82%. Campania has the highest rate at 4.97%. Special statute regions (Sicily, Sardinia, Friuli-Venezia Giulia, Trentino-Alto Adige, Aosta Valley) generally apply the standard 3.9% rate. The regional rate difference can meaningfully affect the overall tax burden.
ACE (Aiuto alla Crescita Economica) — equity incentive
The ACE regime provides a notional deduction equal to 2.5% of qualifying new equity capital increases. This deduction reduces the IRES taxable base and can result in significant tax savings for capitalized companies. The ACE benefit effectively lowers the tax advantage of debt relative to equity financing, creating a more neutral tax treatment. The deduction can also generate excess ACE that may be carried forward or, in some cases, result in a tax refund.