Two taxes, two different bases
The taxes on an Italian SRL's income are two, and they do not share a base. IRES, the corporate income tax, is charged on the net taxable income at 24%. IRAP, the regional tax on production, is charged on the net value of production at the standard rate of 3.90%. They are not two names for the same thing: a company can have zero taxable income for IRES — because it closed at a loss, or because it has losses carried forward — and still have to pay IRAP.
A 26% withholding generally applies to dividends paid to resident individuals holding shares outside a business. This is deducted from the shareholder's distribution, not an additional company tax. Corporate and non-resident shareholders require a separate assessment, covered by the dividend withholding calculator.
| Tax | Rate | Base | Source |
|---|---|---|---|
| IRES | 24% | Net taxable income for the period, determined from the statutory profit with the increases and decreases of the TUIR | Art. 77(1), TUIR |
| IRAP | 3.90% standard; 5.90% for specified predominant activities for the two tax periods under Decree-Law 21/2026, before regional adjustments | Net value of production, not profit; allocate the base across regions under statutory territorial rules where applicable | Art. 16(1), Legislative Decree 446/1997; art. 3(1), Decree-Law 21/2026 |
| Dividend withholding | Generally 26% for resident individuals holding shares outside a business | Dividend paid to the shareholder, not an additional company tax; other recipients require separate assessment | Art. 27, Presidential Decree 600/1973 |
The IRES base
IRES is not charged on turnover or on net assets, but on the net taxable income of the period, determined under the TUIR — the Italian income tax code. The starting point is the statutory profit, to which the increases and decreases required by the rules are applied: non-deductible costs, tax depreciation, gains spread over several years, losses carried forward. The result is the base on which the 24% applies.
Under art. 6 of Decree-Law 185/2008, a flat deduction equal to 10% of IRAP actually paid may reduce business income where the IRAP base includes net interest expense (interest paid and similar charges net of interest received). The cash principle and eligibility matter. The separate deduction for IRAP attributable to employees and assimilated workers takes personnel costs net of deductions already applied to the IRAP base; permanent-employee costs are generally already deductible from that base. These rules do not make all calculated IRAP deductible from IRES income.
This calculator instead subtracts 10% of the calculated IRAP from the entered income as a simplifying assumption. It does not determine the legally available deduction, which depends on eligibility and IRAP actually paid.
Where the tax year closes at a loss, no IRES is due and the loss can be used in later years within the limits of art. 84 of the TUIR.
IRAP and its regional variables
IRAP has a standard rate of 3.90% before regional adjustments. Regions may vary it, also by sector, by up to 0.92 percentage points. Check the rates in the regions to which the IRAP base is allocated. For a business operating in more than one region, allocation follows statutory territorial rules, including qualifying establishments, sites, offices and fixed bases; it is not determined solely by the registered office.
A two-percentage-point increase applies only to the specified predominant activities for the two tax periods covered by Decree-Law 21/2026: for a calendar-year taxpayer, 2026 and 2027. The 5.90% selector compares this scenario before regional adjustments; it does not determine whether your company qualifies.
Balance and advances through the year
This simplified estimate uses 100% of the prior-year IRES and IRAP declared, split 40/60, or 50/50 where the applicable ISA advance-payment rules require it. The actual advance can differ: minimum-payment thresholds and mandatory recalculations are not modelled. The forecast method allows an estimate based on current-year tax, but an insufficient advance may attract penalties under art. 4(2), Decree-Law 69/1989.
Ordinary deadlines for a calendar-year company, subject to applicable extensions and special rules: the 2025 balance and first 2026 advance instalment by 30 June, with the option to pay by 30 July adding 0.40%; the Redditi SC 2026 return by 2 November 2026; the second advance instalment by 30 November. The calculator does not compute the 2025 balance and therefore does not show all payments due during 2026.
A short guide for a foreign shareholder
If you own an Italian SRL from abroad, these are the points that usually need explaining.
- IRES is the tax on profit, IRAP the tax on production. The 24% applies to taxable income; the 3.90% applies to the net value of production, a base that is closer to value added than to profit. This is why the two figures on your return can move in different directions.
- The company files two returns, not one. The income tax return (Redditi SC) and the IRAP return are separate, even where the second is prepared inside the same software package.
- Advances are prepayments, not an extra tax. The advance is offset against the tax shown by the relevant return. This calculator estimates the 2026 advance separately and does not calculate the 2025 balance or total 2026 payments.
- The combined headline rate is about 27.9%. That is 24% plus 3.90% on the same base; the effective rate differs as soon as the two bases differ, which they normally do. The guide to Italian taxes for foreign-owned companies covers the cross-border side, including the dividend withholding on distributions abroad.
- Regional IRAP is local. Check rates in each region to which the IRAP base is allocated; for multi-region operations the statutory territorial rules, not just the registered office, determine allocation. Check whether the predominant activity falls under the two-period increase of Decree-Law 21/2026.
The accounting and tax service covers the two returns, the advances and the payment calendar; ask about an initial consultation and the applicable terms.
What the calculator does not do
- It does not rebuild your taxable bases from the accounts or apply other TUIR adjustments and losses carried forward.
- The 10% IRAP deduction is a model assumption, not a determination of the legally deductible amount or cash paid.
- It does not apply regional variations, territorial allocation or sector-specific rates beyond the two options offered.
- It does not model minimum advance thresholds or mandatory recalculations, or calculate the 2025 balance.
- It does not compute dividend withholding, which depends on the shareholder; this estimate does not replace a return.
Sources
- Art. 77, TUIR — IRES rate of 24%
- Art. 83, TUIR — determination of taxable income from the statutory profit
- Art. 16, Legislative Decree 446/1997 — IRAP rates and regional variation
- Department of Finance — IRAP: 3.90% standard and 5.90% for the activities of Decree-Law 21/2026
- Art. 17, Presidential Decree 435/2001 — advance payments, instalments and the 0.40% increase
- Agenzia delle Entrate — IRAP 2026 instructions: advances, territorial allocation and ordinary deadlines
- Agenzia delle Entrate — resolution 9/E/2021: IRAP deduction, net interest and payment principle
- Agenzia delle Entrate — Redditi SC 2026 instructions (filing date and IRAP deduction)
Every rate and deadline on this page was read on the text in force on 19 October 2026. The claim-by-claim verification is in the fact-check file of this page.
Related reading
- Italian SRL annual cost calculator — the fixed charges and the recurring services, separate from the taxes.
- Italian taxes for a foreign-owned company — IRES, IRAP, VAT and dividend withholding for non-resident owners.
- Accounting and tax service — the returns, the payment calendar and the engagement.
- All the tools with an English interface.