What is IRAP and what rate applies?
IRAP is a regional tax on net production value. The ordinary rate is 3.90%, and each region may vary it by up to 0.92 percentage points, so the rate depends on your region.
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Detailed Explanation
## What is IRAP?
IRAP (Imposta Regionale sulle Attività Produttive) is a regional tax on net production value (valore della produzione netta). It is separate from IRES.
## The rate
The ordinary rate is 3.90%. Each region may vary the rate by up to 0.92 percentage points. Some sectors pay more: banks pay 6.65%, insurers 7.90% and public bodies 8.50%.
## Because it is regional
Any company tax figure is an estimate until the company's region is known. The official regional rate lookup is on finanze.gov.it. Finn asks for your region and labels the figure as an estimate until it has it.
## Deductions and exclusions
The cost of permanent employees is fully deductible from the IRAP base. Forfettari (regime forfetario) do not pay IRAP.
## Filing
The IRAP return is filed on the same date as the IRES return, which is 31 October for calendar-year companies, as part of the Redditi SC.
## A worked 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 the allowed deductions.
## How AccountsOS helps
Finn shows IRAP separately from IRES as an estimate. The exact regional rate needs a check against the official source or with your commercialista. AccountsOS does not submit the IRAP return.
Source: https://www.finanze.gov.it/it/fiscalita/fiscalita-regionale-e-locale/IRAP/disciplina-del-tributo/
Real-World Examples
Company in a region with the ordinary rate
The ordinary 3.90% applies. On net production value of €100,000 the IRAP is €3,900.
Company with mostly permanent staff
The cost of permanent employees is fully deductible from the IRAP base, which lowers the base.
Sole trader in the forfettario regime
The forfettario pays no IRAP.
Common Mistakes to Avoid
- Applying 3.90% in every region
- Forgetting that permanent employee cost is deductible from the base
- Assuming a forfettario owes IRAP
- Treating an IRAP estimate as final before the region is confirmed
Frequently Asked Questions
What is the ordinary IRAP rate?
3.90%.
Can the rate change?
Yes. Each region may vary it by up to 0.92 percentage points.
Do banks and insurers pay more?
Yes. Banks pay 6.65%, insurers 7.90% and public bodies 8.50%.
Do forfettari pay IRAP?
No.
Where do I check my region's rate?
On the official regional lookup at finanze.gov.it.
Practical Tips
- Tell Finn your region so the estimate is labelled correctly
- Check the regional lookup before quoting a figure
- Keep payroll records showing permanent staff
- Ask your commercialista to confirm the IRAP base
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