IRES is the Italian corporate tax – that is, the tax on the profits of companies. It is a proportional tax: the tax rate remains the same, regardless of the amount of profit. It is governed by the Consolidated Income Tax Law (TUIR, Presidential Decree No. 917/1986). IRES replaced the former IRPEG in 2004.
Who is liable to pay IRES?
According to Article 73 of the TUIR, the following, amongst others, are liable to pay IRES:
- companies with registered offices in Italy: limited liability companies (Srl), public limited companies (SpA)
- cooperatives with their registered office in Italy
- public and private bodies with their registered office in Italy
- permanent establishments or branch offices of foreign companies in Italy
Companies resident in Italy are taxed on their worldwide income (worldwide income principle). Bilateral double taxation agreements apply to prevent double taxation.
Partnership companies, sole traders and freelancers are not subject to IRES. Their profits are attributed to the partners or owners and taxed under IRPEF.
The IRES tax rate for 2026
The standard IRES rate is 24%. It has remained unchanged since 2017 and will also apply for the 2026 tax year.
Certain credit institutions and financial intermediaries are generally subject to a supplementary IRES tax. In addition, further special provisions apply to individual companies.
Historical IRES rates
| Year |
Corporation tax rate |
| 2000 |
37% (IRPEG) |
| 2001–2002 |
36% (IRPEG) |
| 2003 |
34% (IRPEG) |
| 2004–2007 |
33% |
| 2008–2016 |
27.5% |
| from 2017 |
24% |
Special case: ‘IRES premiale’ (tax year 2025 only)
The 2025 budget law (Act No. 207/2024, Art. 1, paras. 436–444) introduced a one-off reduction in the tax rate from 24 per cent to 20 per cent – the so-called ‘IRES premiale’. The implementing provisions are set out in the Ministerial Decree of 8 August 2025. However, several conditions must be met simultaneously (e.g. investment in new capital goods in the Transition 4.0 or 5.0; the average number of work units must not fall below the three-year average; and at least 80 per cent of the 2024 profit must be allocated to a non-distributable reserve and retained in equity until the end of 2026). Consequently, very few companies made use of this incentive.
The tax relief applies exclusively to the 2025 tax year. The 2026 budget law did not extend the measure.
How is the tax base calculated?
The starting point is the profit as shown in the balance sheet. From this, the taxable profit is calculated:
- Pre-tax profit under commercial law as shown in the income statement (profit and loss account)
-
Tax adjustments (rettifiche fiscali) increase or reduce the result. Examples include:
- Car expenses that are not deductible or only partially deductible
- Telephone expenses that are only partially deductible
- Income not subject to tax
- Interest that is not deductible due to the interest limitation rule
This step is referred to as the tax plus-minus calculation.
- Further deductions, e.g. the set-off of loss carry-forwards
Loss carry-forward
- Losses from the first three financial years: no time limit and available for full offset.
- Subsequent losses: can be carried forward indefinitely, but only up to 80% of the tax base for the respective year.
Calculation example
| Item |
Amount |
| Profit |
€100,000 |
| Tax adjustments |
+ €30,000 |
| Taxable income |
€130,000 |
| IRES 24% |
€31,200 |
Payment and deadlines
IRES is paid electronically using form F24 – in two instalments (acconti) and a final payment (saldo):
- Balance payment for the previous year and 1st advance payment (40% or 50%): by the last day of the sixth month – i.e. 30 June for a financial year coinciding with the calendar year. Tax Code 2003 or 2001.
- Second advance payment (50% or 60%): by 30 November or the eleventh month following the end of the financial year. Tax Code 2002.
For entities applying the ISA, the advance payments are split 50% and 50%. The deadlines are frequently extended by decree – for example, to 20 July in 2026. Payment within 30 days of the due date is possible subject to a surcharge of 0.4% – 0.8%. The balance payment and the first advance payment may also be paid in instalments.
IRES, IRAP and IRPEF compared
|
Subject to tax |
Tax rate |
| IRES |
Income of limited companies |
24% |
| IRAP |
Regional net production value; personnel and financing costs are partially non-deductible |
generally 3.9%, varying by region |
| IRPEF |
Income of natural persons |
progressive by tax bracket |
Corporations pay both income taxes: IRES and IRAP. During profit distribution to shareholders, dividends are subject to further taxation.