What is IRAP (Italy)?
IRAP (Imposta Regionale sulle Attività Produttive) is a regional tax on net production value (valore della produzione netta). The ordinary rate is 3.90%, and each region may vary it by up to 0.92 percentage points.
Finn does your books in Italy
AccountsOS runs full accounting for Italy businesses, tax, deadlines and invoicing, in plain English. Ask Finn about yours, no signup needed.
Current Rate (Filed with the Redditi SC return by 31 October for calendar-year companies)
3.90% ordinary. Regions may vary it by up to 0.92 points. Banks 6.65%, insurers 7.90%, public bodies 8.50%.
Example
Illustratively, net production value of €100,000 at the ordinary 3.90% rate gives IRAP of €3,900. The real figure depends on the region and on the allowed deductions.
How IRAP (Italy) works in Italy
IRAP is regional, so any company tax figure is an estimate until the company's region is known. The regional rate can be found on the official lookup at finanze.gov.it. The cost of permanent employees is fully deductible from the IRAP base.
Forfettari (regime forfetario) do not pay IRAP. The IRAP return is filed on the same date as the IRES return.
Finn asks for your region and labels every company tax figure as an estimate until it has it. The exact regional rate needs a check against the official source or with your commercialista.
Related terms
IRES (Imposta sul Reddito delle Società) is the national corporate income tax paid by Italian companies. The rate is 24% of taxable profit. Companies also pay IRAP, a separate regional tax, so the total burden is higher than 24%.
The regime forfetario is a flat-rate regime for Italian sole traders and professionals. It taxes a fixed share of revenue at a 15% substitute tax, or 5% for the first five years of a new activity, with no IVA charged and no IRAP.
The modello F24 is the payment form Italian taxpayers use to pay IRES, IRAP, IVA, withholding tax and INPS contributions to the Agenzia delle Entrate and INPS.
Confused by Italy accounting jargon?
AccountsOS explains Italy terms in plain English and applies the right rules to your books automatically.
Try Free