2026 Budget Law: latest news

2026 Budget Law: latest news

The 2026 Budget Law is Law No. 199 of 30 December 2025, which entered into force, except for specific dates, from 1 January 2026. During the year, some provisions were subsequently amended by corrective and conversion measures, so it is necessary to distinguish between original measures and updates that took place in 2026. The Budget Law for 2026 PF26 9G - 2026 BUDGET LAW: LATEST NEWS OF THE PERIOD

1. IRPEF: reduction of the second rate

The second IRPEF rate has been reduced:

The reduction concerns the second bracket of IRPEF and produces the main generalized effect of the maneuver on natural persons. Law 199 of 2025-12-30, Article 1

For taxpayers with a total income of more than €200,000 , there is a reduction of €440 in deductions relating to 19% deductible charges, with the exclusion of health expenses. Law 199 of 2025-12-30, Article 1

2. Employees: salary increases

For employees in the private sector with employment income received in 2025 not exceeding €33,000, salary increases paid in 2026 in implementation of collective agreements signed in 2024, 2025 or 2026 are subject to a substitute tax of 5%.

The employee may waive the application of the substitute tax by written waiver. Circular No. 2 of 2026 Determination of taxable remuneration for tax purposes

Operational effects for the employer

The employer must:

• verify the employment income earned by the employee in 2025;

• identify the increases actually linked to the contract renewal;

• apply the 5% substitute withholding tax;

• manage any written waiver by the worker;

• Correctly indicate the sums in the Single Certification and in Payroll Management.

3. Productivity bonuses: 1% rate

For productivity bonuses and sums deriving from profit sharing paid in the years 2026 and 2027:

• the substitute tax drops from 5% to 1%;

• The maximum allowable limit goes from 3,000 to 5,000 euros gross.

The limit of 5,000 euros also applies when the employee opts for the conversion of the bonus into company benefits. Resolution No. 22 of 2026

The prerequisites provided for by the rules on performance bonuses remain necessary, including the link with increases in productivity, profitability, quality, efficiency or innovation provided for by company or territorial bargaining.

4. Night, holiday and shift work

For the 2026 tax period, there is a substitute tax of 15% on increases and allowances recognized for:

• night work;

• holiday work;

• work performed on weekly rest days;

• shiftwork.

The benefit applies within the overall limit of 1,500 euros and concerns employees in the private sector with 2025 employment income not exceeding 40,000 euros. Circular no. 2 of 2026

The measure must be distinguished from the 5% tax relief on salary increases from contract renewal: they can concern different components of remuneration and have different assumptions.

5. Electronic meal vouchers

From 2026, the daily limit of non-taxability of electronic meal vouchers increases from 8 to 10 euros . The change concerns only electronic meal vouchers; the treatment of paper vouchers remains distinct. PF26 9G - 2026 BUDGET LAW: LATEST NEWS FOR THE PERIOD MB27 9G - IRPEF news

6. Building deductions

For expenses incurred in 2026, the most favorable regime for building interventions is confirmed.

For 2027, the rates will drop to 30% and 36% respectively. Ruling no. 119 of 2026 Deduction for renovation work: general aspects

The 50% increase in 2026 requires that:

• the intervention concerns the real estate unit used as a main residence;

• the expense is incurred by the owner or by the holder of a real right of enjoyment;

• the additional requirements of the deduction applied are complied with.

The deductions relating to:

• building renovations;

• energy saving;

• anti-seismic interventions;

• mobile bonuses, according to the limits and specific conditions of the regulations in force. The Budget Law for 2026 MB27 9G - IRPEF news

7. Short-term rentals

From the 2026 tax period, the short-term rental regime is limited to activities relating to no more than two apartments.

For the short-term rental of a greater number of properties, the presumption of exercise of business activity applies. MB27 9G - IRPEF news

The verification must be carried out considering the number of apartments intended for short-term rentals and not only the number of contracts stipulated.

8. Flat-rate regime

The threshold of 35,000 euros relating to employment income and similar income received in the previous year, relevant for the purposes of accessing or remaining in the flat-rate regime, has been extended for 2026. MB27 9G - IRPEF news

The verification must be carried out considering:

• employment and similar income received in 2025;

• the causes of exclusion from the regime;

• the limit of revenues or fees provided for the flat-rate regime;

• any other obstructive conditions.

9. Businesses and self-employed persons

The most relevant measures for companies and professionals include:

• facilitated assignment of certain assets to shareholders;

• changes to the taxation of capital gains on capital goods;

• reopening of the release of tax-deferred reserves;

• changes to the taxation of dividends;

• extension or refinancing of investment incentives;

• new rules for the deductibility of certain expenses incurred by professionals;

• Stricter limitations and controls on tax offsets. MB27 9G - News for companies and self-employed workers

Facilitated assignment of assets to shareholders

The temporary regime has been re-proposed which allows, when the conditions are met, the assignment or facilitated transfer to shareholders of:

• non-instrumental properties;

• movable property registered in public registers;

• assets not used directly in business activities.

The regulations provide for an ordinary substitute tax of 8%, raised to 10.5% for non-operating companies, as well as specific rules for tax-deferred reserves. MB27 9G - News for businesses and self-employed workers

10. Investments and hyper-depreciation

The maneuver proposes an increase in the fiscally recognized cost for certain investments in capital goods with 4.0 characteristics.

The increases indicated for eligible investments are:

The measure concerns investments made in the subsidized period provided for by law and requires compliance with the technical, documentary and temporal conditions established by the regulations. MB27 9G - News for companies and self-employed workers

11. Tax offsets

The threshold linked to access to compensations through the F24 form in the presence of the conditions provided for by the law has been reduced to 50,000 euros . PF26 9G - 2026 BUDGET LAW: LATEST NEWS OF THE PERIOD

The measure requires particular attention:

• the actual availability of credit;

• the correct indication of the tax code;

• the presence of any debts entered in the register;

• the time limits of use;

• the conditions for affixing the conformity stamp;

• the specific rules provided for each credit.

12. Dividends and equity investments

The law intervenes on the tax treatment of dividends received by resident companies and companies.

To access the 95% tax exclusion regime, according to the available regulatory summary, the possession of a direct shareholding of at least 5% or a shareholding with a tax value of not less than 500,000 euros is required. MB27 9G - News for companies and self-employed workers

The verification must be carried out considering:

• the percentage of direct participation;

• the tax value of the investment;

• the nature of the recipient;

• the effective date of distribution;

• coordination with the regime of qualified shareholdings and with the IRES regulations.

13. IRAP

For banks, financial intermediaries and insurance companies, changes in IRAP rates are expected for the three-year period 2026-2028.

The increase indicated is equal to 2 percentage points for the subjects concerned, with a deduction of 90,000 euros intended to compensate, in certain subsequent periods, the tax difference resulting from the increase. Legislative Decree 446 of 1997-12-15, Article 16

The measure does not concern all IRAP taxable persons indiscriminately: the specific category to which they belong and the possible application of the exclusions provided for by the rule must be verified.

14. Tax credit in Simplified Logistics Zones

The forms for the communication necessary for the purposes of the tax credit for investments made in the Simplified Logistics Zones have been approved, with reference to investments made in the years 2026, 2027 and 2028. Order of 30/01/2026 (803cca7e-5c87-f796-20a6-229cb108f7a6?t=1769800399500)

The facility requires:

• the implementation of eligible investments;

• respect for territorial conditions;

• the submission of the communication according to the approved model;

• the correct storage of documentation;

• compliance with the terms and methods of use of the credit.

15. Supplementary pensions: subsequent amendments

During 2026, changes were made to the provisions of the Budget Law relating to the benefits of supplementary pension schemes.

In particular:

• a percentage provided for by the original regulations has been reduced from 60% to 50%;

• the application of certain provisions on the split disbursement of the amount has been deferred;

• Some rules are applicable from 31 October 2026. Law 112 of 2026-06-25, Annex Annex

This is an update following the publication of the budget law, to be considered in the management of supplementary pension benefits and in social security advice.

16. VAT

The law introduces some changes in the field of VAT, including:

• automated VAT settlement in the event of failure to submit the annual return;

• modification of the taxable base of exchange transactions and payments in payment;

• interventions on tax free shopping;

• adjustments of the national framework to EU legislation. MB27 10G - The news of the 2026 Budget Law on VAT

The introduction of Article 54-bis1 in Presidential Decree no. 633/1972 gives importance to the management of omitted VAT returns and subsequent automated checks.

17. Agriculture and fuels

For agricultural businesses, a tax credit of up to 20% of the expenditure incurred for the purchase of diesel and petrol in the months from March to May 2026 has been provided for agricultural businesses, within the overall expenditure limit of 90 million euros.

The credit can only be used in compensation by 31 December 2026. Decree-Law 38 of 2026-03-27, Article 8-ter

18. Measures introduced or amended subsequently

The main changes subsequent to the budget law concern:

• supplementary pension and effective dates of certain provisions; Law 112 of 2026-06-25, Annex Annex

• repeal of paragraphs 138 and 139 of Article 1 of Law No. 199/2025; Law 88 of 2026-05-22, Annex Annex

• regulation of payments and cases of late payment of more than five days in specific cases; Law 88 of 2026-05-22, Annex Annex

• further amendment of the effective date of certain provisions on supplementary pension provision to 1 July 2026 and 31 October 2026; Law 50 of 2026-04-20, Annex Annex

• sectoral interventions for maritime enterprises, crafts, internationalization, agricultural enterprises and major events. Decree-Law 38 of 2026-03-27, Article 1

Summary by category

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Practical implications

For professional activity, it is necessary to update:

• payroll procedures and certifications for substitute taxes of 5%, 1% and 15%;

• verification of workers' income requirements;

• management of performance bonuses and benefits;

• calculation of 2026 building deductions;

• checks on short-term leases;

• verification of the requirement of 35,000 euros for the flat-rate regime;

• procedures for offsets and tax credits;

• templates and communications for ZLS investments;

• accounting for subsidized assignments to shareholders;

• calculation of IRAP for banks, intermediaries and insurance companies;

• management of changes to supplementary pensions;

• updating of VAT procedures on omitted declarations and exchange transactions.

Conclusion

The most significant changes in the 2026 Budget Law concern the reduction of the IRPEF rate to 33%, the detaxation of salary increases and productivity bonuses, the extension of building deductions, the limit of two apartments for short-term rentals, measures for investments and businesses, as well as the new rules on compensation and VAT.

For correct application, it is also necessary to consider the regulatory changes that have occurred since the publication of the law, in particular on supplementary pensions, payments and sectoral measures introduced during 2026.