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Corporate Income Tax IRES in Italy (Imposta sul Reddito delle società))

7/21/2025

The Corporate Income Tax IRES (Imposta sul Reddito delle Società)

The IRES (Imposta sul Reddito delle Società) is the corporate income tax in Italy. It is a proportional tax applied to the income of corporations and certain other entities. The IRES replaced the former IRPEG and is regulated by the Consolidated Income Tax Act (TUIR).

Who is subject to IRES?

IRES is payable by the following entities:

Corporations (SRL, SPA).
Cooperatives, mutual insurance companies, European companies and European cooperative societies based in Italy.
Public and private entities based in Italy, including consortia, trusts, collective investment schemes and non-profit organizations.
Trusts not based in Italy, but only for income generated in Italy.

Companies resident in Italy must pay IRES on their worldwide income. Bilateral double taxation treaties are in place to prevent double taxation. If a foreign company establishes a permanent establishment in Italy under tax law, the profits generated there are also taxable in Italy.

Partnerships and freelancers are not subject to IRES, as their income is taxed under IRPEF (personal income tax).

The IRES Tax Rate

The standard IRES rate for 2025 is 24%. This flat rate is applied to the company's taxable income.

Italian tax legislation has been updated several times in recent years to harmonize and modernize it in line with other major EU countries. Starting from 2025, a reduction of 4% is possible through the introduction of the “IRES premiale”.

Historical IRES Rates by Year

IRES has undergone several changes over the years to harmonize and modernize the Italian tax system.

Historical IRES tax rates in Italy:

Year	IRES / IRPEG Rate
2000	37% (IRPEG)
2001–2002	36% (IRPEG)
2003	34% (IRPEG)
2004–2007	33%
2008–2016	27.5%
2017–2023	24%
From 2024	24%

Until the end of 2003, the former IRPEG was in force, with a rate of 37% in 2000, then gradually reduced: 36% in 2001–2002, 34% in 2003. From 2004, IRES replaced IRPEG with a flat rate of 33% until 2007. Between 2008–2016 the rate was reduced to 27.5%. Since 2017 the rate has been 24% and remains valid for 2024 and 2025.

How is the IRES tax base calculated?

The IRES tax base starts from the statutory net income of the company, derived from business activities.

The process includes the following steps:

Starting point: accounting result – Based on the profit and loss statement, reflecting the company’s revenues and expenses.
Mandatory tax adjustments – Fiscal corrections required by law are applied to the accounting result. These may increase or decrease the taxable base and are known as “plus/minus adjustments”. Examples include non-deductible expenses, amortization, or provisions.
Further tax deductions – Additional deductions may apply, such as the ACE (notional interest deduction) or loss carryforwards:
- Tax losses from the first three tax years can be carried forward indefinitely and fully offset against future taxable income.
- Losses from the fourth year onward can also be carried forward without time limit, but may only offset up to 80% of the taxable income of future years.

After these adjustments, the final tax base is determined, to which the 24% IRES rate is applied to calculate the tax payable.

Practical example:

Revenues: €100,000
Deductible costs: €30,000
Taxable income: €70,000
Tax due (24%): €16,800

How and when is IRES paid?

IRES is paid electronically via the F24 form. Payment is divided into two advance payments and a final balance, based on the previous year’s tax.

Payment deadlines and prepayments:

First prepayment: Due by June 30 of the current year, equal to 40% of the prior year’s tax (50% for ISA subjects).
Second prepayment: Due by November 30, equal to 60% of the prior year’s tax (50% for ISA subjects).
Balance: Due by June 30 of the following year, based on actual income.

For example, by June 30, 2025, both the IRES balance for 2024 and the first prepayment for 2025 must be paid. The second prepayment is due by November 30, 2025.

Distinction between IRES and other taxes

IRES vs. IRAP: IRES taxes the net income of companies, while IRAP (Regional Tax on Productive Activities) is a regional tax based on net production value, excluding certain costs such as employee and financial expenses.
IRES vs. IRPEF: IRES applies to corporate income with a flat 24% rate, regardless of profit level. IRPEF is a progressive personal income tax, with rates increasing based on income brackets.

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