Draft budget law: a few tax changes coming in 2026

​With the approval of the Council of Ministers on October 17, 2025, the first draft of the much-awaited Budget Law for the year 2026 began to circulate. Here are the tax changes that got the most attention and are still up for change as the bill goes through Parliament for final approval.

The draft 2026 budget bill reintroduces the increased depreciation allowance for investments in capital goods, formerly known as hyper-amortization, with reference to assets covered by the current tax credits 4.0 and 5.0, which will expire in 2025.

Hyper-amortization should be recognized for investments in new fixed assets (tangible and intangible) included in Annexes A and B to Law 232/2016, as well as for investments in new tangible fixed assets intended for the self-production of energy from renewable sources for self-consumption, including at a distance. The benefit will take the form of an IRES tax increase on the acquisition cost of the aforementioned assets in the amount of:

Furthermore, a supplementary increase in the subsidy amount would be envisaged in the case of investments aimed at achieving ecological transition objectives.

In order to access the benefits in question, it will be necessary to submit a specific electronic notification via a platform developed by the GSE (Energy Services Manager) and to be in possession of certifications concerning the eligible investments. In any case, a subsequent ministerial decree will define the implementing provisions for the subsidy.

The draft 2026 Budget Law contains a proposal to revise the regime provided for in Article 24-bis of the TUIR for individuals who transfer their tax residence to Italy in relation to foreign generated income (the so-called neo-domiciled regime). In particular, starting from January 1, 2026, the annual substitute tax to be applied to income generated abroad should be increased:

A major development currently contained in the draft Budget Law should concern the taxation of intra-company dividends originating from shareholdings of less than 10 per cent in the companies or entities distributing them.

Specifically, these dividends will no longer be eligible for 95 per cent exclusion from taxable income (currently provided for in Article 89, paragraph 2, of the TUIR) but will be fully taxable for their recipients.

The regulatory change would apply to dividends received by both corporations and partnerships; however, nothing would change with regard to the position of individuals.

The new provisions would apply to distributions of profits and profit reserves approved from January 1, 2026. If the final version of the Budget Law confirms the change under consideration, a phase of verification of group structures could begin to understand if and how it is possible to continue to benefit from taxation on only 5 per cent of dividends received.

The 2026 Budget Law should also address the regulation of capital gains installment payments within business income, increasing the period of ownership required to access the benefit and reducing the number of installments generally allowed.

Article 86(4) of the TUIR currently provides that "Capital gains realized, other than those referred to in Article 87 below and determined in accordance with paragraph 2, shall be included in taxable income for the full amount in the financial year in which they are realized or, if the assets have been held for at least three years (or two years in the case of professional sports clubs), at the taxpayer’s option, in equal installments in the same financial year and in subsequent years, but no later than the fourth year."

The draft budget law for 2026 rewrites paragraph 4 of Article 86 of the TUIR, establishing that capital gains realized on assets related to the business and on shareholdings other than those falling under the PEX regime may be spread over a maximum of three tax periods (instead of the current five tax periods), provided that the assets have been held for a period of not shorter than five years (instead of the current three-year holding period).