Over the past two years, almost two hundred thousand Ukrainian citizens who are under protection in Italy have been gradually transitioning from emergency survival to obtaining legal status, finding work, or starting a small business. As their lives stabilize, most of them encounter one of the most difficult parts of Italian life to understand – the taxation system. Whether you are a permanent employee, self-employed or temporary contractor, the tax burden in Italy remains high and detailed. For Ukrainians who previously had no experience of interacting with multi-level fiscal structures, getting to know this system often becomes an unexpected challenge.
Basic structure: three levels of income tax
Personal income tax (IRPEF — Imposta sui redditi delle persone fisiche) in Italy is levied on a three-level model: national, regional and municipal. This means that the total tax rate is formed from the sum of three independent components that are administered by different structures.
The national IRPEF scale in 2025 is:
- income up to 15,000 euros — 23%
- from 15,001 to 28,000 euros — 25%
- from 28,001 to 55,000 euros — 35%
- over 55,001 euros — 43%
This scale applies to all tax residents of Italy. Ukrainians who have the status of temporary protection, as well as permanently live and work in Italy for more than 183 days a year, are usually equated to tax residents. In this case, they are obliged to declare and pay tax on all income received both in Italy and abroad. For those who remain a tax non-resident, only income earned within the country is taxed.
The regional tax varies from 1.23% to 3.33% depending on the place of residence. For example, in Lombardy the rate is lower than in Lazio or Campania.
The municipal tax ranges from 0–0.8% and is set at the commune level. Thus, two employees with the same salary may have a different fiscal burden depending on the region and city of residence.
Social contributions
Separately from income tax, employees and employers pay contributions to the social security system. In 2025, their total amount is about 40% of gross income, of which approximately 30% is covered by the employer and 10% is deducted from the employee’s salary. These contributions are used to finance the pension system, health insurance, unemployment benefits and accident insurance.
For Ukrainians, this means that even with a formally high salary, the net disposable income is much lower. For example, with an official income of 24,000 euros per year (2,000 per month), after paying taxes and contributions, the employee receives about 1,400 euros.
Value Added Tax (IVA)
Value added tax (IVA — Imposta sul valore aggiunto) in Italy is applied to most goods and services. The base rate is 22%, but there are several reduced rates:
- 10% — food products, electricity, transport services
- 4% — basic food products, medical supplies, prostheses, books, some social services
- 0% — export operations
Although this tax is not paid directly by citizens (it is embedded in the price of the product or service), entrepreneurs are required to register as IVA payers, keep records and submit declarations. For Ukrainians who start a business or work as freelancers, this is one of the most important issues of financial literacy.
A simplified system for small business
A separate regime is provided for individual entrepreneurs and freelancers – Regime forfettario. This is a simplified taxation system that can be chosen by those whose annual income does not exceed the established limit (up to 85,000 euros in 2025).
In this case, the entrepreneur pays a single tax at the rate of 15% (or 5% during the first five years of activity), without calculating real costs. However, there are restrictions within this system – for example, it is not available to those who have employees or exceed an income threshold.
The simplified system is the most common form of start for Ukrainians who open small coffee shops, salons, work in the field of household services or IT. At the same time, it is worth considering that even in this mode, it is necessary to comply with accounting and reporting requirements, as well as regularly consult with tax consultants.
Corporate taxes
For companies registered as legal entities, a different procedure applies. The basic corporate income tax (IRES) is 24%. Added to this is the Regional Tax on Production Activities (IRAP) at a rate of 3.9%, although this may vary by region.
Ukrainian entrepreneurs who register a full-fledged legal entity in Italy must take into account both rates, as well as the responsibility for social contributions for employees.
Italian tax law is complex and its mechanisms are not always obvious to newcomers. For this reason, most Ukrainians turn to CAF — special tax assistance centers that help fill out declarations, prepare documents, and keep records of expenses and income.
It is also important to remember the obligation to submit a declaration of income (dichiarazione dei redditi), even in cases where the income was small or irregular. Failure to comply with these requirements entails fines or loss of access to social services.
So, the Italian tax system is multi-level and formalized. Ukrainians who are in the country with the right of temporary protection or have already integrated into the employment system should take into account both the volume of the fiscal burden and differences between regions, forms of work and residency statuses. More and more immigrants are moving from a temporary situation to a more permanent one, and therefore must master not only the language and daily life, but also the rules of tax interaction. Understanding this system depends not only on legality of stay, but also access to social guarantees, protection of the rights of an employee or entrepreneur, and confidence in the future.
