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2026 Budget Law: what changes for firms, shareholders and families

IRPEF at 33%, capital gains taxed in a single year, short-term lets, crypto and 21% revaluation: what changes in 2026 and what to do by 30 November.

The 2026 Budget Law (Law no. 199 of 30 December 2025) cuts the IRPEF (personal income tax) rate on income between EUR 28,000 and EUR 50,000 from 35 to 33 per cent, limits the flat tax on short-term lets to two apartments, raises the tax on the revaluation of shareholdings to 21 per cent and taxes business capital gains on individual assets in full in the year. The tightening of the rules on dividends and on the participation exemption for capital gains on shareholdings (PEX), on the other hand, was repealed by Decree-Law 38/2026, with effect from 1 January 2026. For revaluations, assignments of assets to shareholders and removals of property from the business, the next deadline is Monday 30 November 2026.

The framework

IRPEF. From 2026 the rates are 23 per cent up to EUR 28,000, 33 per cent up to EUR 50,000 and 43 per cent above that: this is provided by paragraph 3, which amends Art. 11, para. 1, letter b), of the Consolidated Income Tax Act (TUIR). Paragraph 4 inserts paragraph 5-bis into Art. 16-ter TUIR: above EUR 200,000 of total income, the aggregate of the 19 per cent tax credits for qualifying expenses (excluding medical expenses), donations to political parties and disaster insurance policies is reduced by EUR 440.

Employment income. A 5 per cent substitute tax on pay increases paid in 2026 under renewals of collective agreements signed from 2024 to 2026, for private-sector employees with 2025 employment income of up to EUR 33,000 (paragraph 7). Performance bonuses for 2026 and 2027 taxed at 1 per cent up to EUR 5,000, under the conditions of Law 208/2015, i.e. bonuses provided for by company-level or territorial agreements and an income limit for the employee (paragraph 9). A 15 per cent substitute tax, up to EUR 1,500, on night work, public-holiday work and shift work, with 2025 income of up to EUR 40,000 (paragraphs 10 and 11), excluding hospitality outlets (pubblici esercizi) such as bars and restaurants, tourism and spas, where from 1 January to 30 September 2026 a tax-exempt 15 per cent supplementary payment (trattamento integrativo) is granted instead on night work and overtime on public holidays, at the request of the employee, who certifies his or her 2025 income in writing (paragraphs 18-21). Electronic meal vouchers are exempt up to EUR 10 per day (paragraph 14).

Short-term lets. From 2026 the flat tax (cedolare secca) on short-term lets under Art. 4 of Decree-Law 50/2017 (21 per cent on one chosen property, 26 per cent on the others) is available only for up to two apartments; from the third onwards, the activity is presumed to be a business (paragraph 17, amending Art. 1, para. 595, Law 178/2020).

Crypto-assets. From 1 January 2026 capital gains are taxed at 33 per cent (Art. 1, para. 24, Law 207/2024). Paragraph 28 keeps euro-denominated e-money tokens at 26 per cent.

Revaluation of shareholdings. Paragraph 144 raises from 18 to 21 per cent the tax under Art. 5 Law 448/2001 on interests held at 1 January: sworn appraisal (perizia giurata) and payment by 30 November, also in three annual instalments with 3 per cent interest. For land (Art. 7) the rate remains 18 per cent.

Businesses. Paragraphs 42-43, new Art. 86, para. 4, TUIR: capital gains realised from 2026 are taxed in full in the year; spreading over five financial years remains available only for businesses and business units held for at least three years and, for professional sports clubs, for rights to athletes’ services held for at least two years. Paragraphs 35-41: assignment of assets to shareholders on preferential terms (8 per cent substitute tax, 10.5 per cent for non-operating companies) with the 40 per cent balance due by 30 November 2026; removal of real estate from the business of a sole proprietor, with instalments due on 30 November 2026 and 30 June 2027. No offsetting of tax credits in the F24 payment form where overdue tax-roll debts (ruoli) exceed EUR 50,000 (previously EUR 100,000), unless an instalment plan is in place and has not lapsed; social security and insurance credits remain eligible for offsetting (Art. 37, para. 49-quinquies, Decree-Law 223/2006, from 2027 Art. 5, para. 7, Legislative Decree 33/2025, both amended by paragraph 116). Paragraphs 112-115: on payments made from 2028, withholding agents apply a 0.5 per cent withholding tax on account (1 per cent from 2029; Art. 25 Presidential Decree 600/1973 and, from 2027, Art. 38 Legislative Decree 33/2025) on the consideration for supplies of goods and services made by businesses, unless the business has joined the two-year advance tax agreement (concordato preventivo biennale) or is in the cooperative compliance regime (adempimento collaborativo), and except for payments made by the dedicated bank transfer used for tax deductions (Art. 25 Decree-Law 78/2010); the procedures will be set out in a measure (provvedimento) of the Revenue Agency.

Dividends and PEX. Paragraphs 51-55, which made the 95 per cent exclusion and the PEX conditional on a shareholding of 5 per cent or EUR 500,000, were repealed by Art. 11 of Decree-Law no. 38 of 27 March 2026, converted by Law no. 88 of 22 May 2026, with effect from 1 January 2026.

From 1 January 2027 the TUIR provisions cited here move into the consolidated income tax code (testo unico delle imposte sui redditi, Legislative Decree no. 117 of 19 June 2026), with different article numbering.

What changes in concrete terms

With taxable income of EUR 40,000, the saving is 2 per cent on EUR 12,000, i.e. EUR 240; from EUR 50,000 upwards, EUR 440. Taxpayers above EUR 200,000 with at least EUR 440 of tax credits affected by the cut gain nothing.

A shareholder holds an interest in an srl (limited liability company) purchased for EUR 10,000 and appraised at EUR 100,000 at 1 January 2026. Selling without revaluation, the shareholder pays 26 per cent on 90,000, i.e. EUR 23,400; with revaluation, 21 per cent on 100,000, i.e. EUR 21,000 plus the cost of the appraisal. With a cost of EUR 40,000 the outcome is reversed: EUR 15,600 against EUR 21,000. Revaluation pays off only if the capital gain exceeds 80.77 per cent of the appraised value (21 divided by 26), without counting the cost of the appraisal.

An srl that sells a machine in 2026 with a capital gain of EUR 50,000 pays EUR 12,000 of IRES (corporate income tax) in the year, instead of EUR 2,400 a year for five years. Companies that spread capital gains on assets in 2025 and use the historical method also recalculate the 2026 advance payment as if the rule had already applied in 2025 (paragraph 43).

In practice

• Companies that have assigned assets to shareholders pay the remaining 40 per cent by F24 by 30 November 2026; sole proprietors who have removed property from the business pay the first instalment by the same date.
• Those revaluing interests held at 1 January 2026 have the appraisal sworn by a qualified professional, such as a chartered accountant (dottore commercialista) or a statutory auditor, and pay at least the first instalment by 30 November 2026, keeping the appraisal and the payment receipts.
• Before offsetting tax credits, the position with the tax collection agency (Riscossione) is checked and, where overdue tax-roll debts exceed EUR 50,000, an instalment plan is requested.
• Employers apply the substitute taxes through payroll, unless the employee waives them in writing, and obtain written certification of 2025 income from those hired during the year. INPS social security contributions remain the ordinary ones (paragraph 11; no relief is provided for under paragraph 7): the saving is purely a tax saving and goes to the employee. In hospitality outlets and tourism, the employer pays the supplementary payment through payroll and recovers it by offset in the F24 (paragraph 21).
• Those letting three or more apartments on a short-term basis should consider registering for VAT (partita IVA) without delay: the rules have applied since January 2026.

Mistakes to avoid

• Applying to dividends or PEX the 5 per cent or EUR 500,000 threshold, repealed from 1 January 2026.
• Spreading over five financial years the capital gain on an individual asset sold in 2026.
• Revaluing land at 21 per cent: the rate remains 18.
• Taxing crypto-assets sold in 2026 at 26 per cent, except euro-denominated e-money tokens.
• Using the flat tax on short-term lets with three apartments: the regime is lost for all of them.

References

Law no. 199 of 30 December 2025, Art. 1, paras. 3, 4, 7, 9-11, 14, 17-21, 28, 35-43, 51-55, 112-116 and 144

Decree-Law no. 38 of 27 March 2026, Art. 11, converted by Law no. 88 of 22 May 2026

TUIR, Arts. 11, 16-ter, 51, 86, 87, 89

Law 207/2024, Art. 1, para. 24

Law 178/2020, Art. 1, para. 595

Decree-Law 50/2017, Art. 4

Law 448/2001, Arts. 5 and 7

Decree-Law 223/2006, Art. 37, para. 49-quinquies (from 2027 Art. 5, para. 7, Legislative Decree no. 33 of 24 March 2025)

Presidential Decree 600/1973, Art. 25 (from 2027 Art. 38 Legislative Decree 33/2025, amended in parallel by para. 113)

Decree-Law 78/2010, Art. 25

Law 208/2015, Art. 1, paras. 121 and 182

Legislative Decree no. 117 of 19 June 2026