Italy: Amendments to the 2026 Italian Budget Law officially approved

Following TaxFlash T25019, Clearstream¹ informs clients that the amendments to the 2026 Budget Law n.199/2025 were approved in parliament on 30 December 2025.

Effective

1 January 2026

the changes to the Italian Financial Transaction Tax (IFTT) and the withholding tax on dividends paid to EU/EEA corporate shareholders (1.2 %) will apply. 

Impact on clients

The following changes must be considered by clients and beneficial owners.

IFTT

The IFTT rates are doubled as follows:

• IFTT on transactions executed on a regulated market: from 0.1% to 0.2%;
• IFTT on transactions executed OTC: from 0.2% to 0.4%;
• IFTT on high frequency trading: from 0.02% to 0.04%.

Currently Clearstream have no role in the collection of IFTT, it is the full responsibility of the beneficial owners. Please refer to the Market Link Guide for the list of securities impacted.

Withholding tax on dividends

The 1.2% withholding tax on dividends available to EU/EEA corporate shareholders will apply only if the beneficiary meets one of the following conditions:

• Holds at least 5% of the share capital of the distributing company (directly or through controlled entities); or
• The fiscal value of the ownership stake linked to the dividend is at least EUR 500,000.

The amendment of the process and the forms to apply the 1.2% withholding tax are currently under review with our local partner. Clients will be informed as soon as clarified. Until then, the application of the 1.2% tax rate is suspended.

The new law is applicable for dividends approved from 1 January 2026. Therefore, dividends paying in January 2026 that were approved before the new law are out of scope and the previous rules will be applicable.

Further information

For further information about the withholding tax procedures for Italian equities, please refer to the Market Taxation Guide - Italy.

Clients may contact the Tax Help Desk, Clearstream Client Services or their Relationship Officer.

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1. Clearstream refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Europe AG, registered office at Mergenthalerallee 61, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500. Clearstream Banking S.A. is registered as an Australian CS (Overseas) Facility, under subsection 824B(2) of the Corporations Act 2001, with registration number ARBN 675 244 783.