Does Italy use progressive tax brackets?

AI Answer
Yes, Italy uses a progressive income tax system, meaning higher income portions are taxed at higher rates. This system, called IRPEF (Imposta sul Reddito delle Persone Fisiche), has five brackets. For 2024, the lowest bracket taxes income up to €28,000 at 23.0%. The top marginal rate is 43.0% for income exceeding €50,000. For example, if you earn €60,000, your first €28,000 is taxed at 23%, the next portion up to €50,000 is taxed at 35%, and only the €10,000 above €50,000 is taxed at 43%. This structure means your effective (average) tax rate is always lower than your highest marginal rate. It's designed to ensure those with higher incomes contribute a larger percentage of their earnings to the tax system. When considering a move to Italy, factor in these progressive rates as they significantly impact your take-home pay.