France vs Italy taxes (2026): IFI, IVIE/IVAFE and PFU

France vs Italy tax rates at a glance

Tax	🇫🇷 France	🇮🇹 Italy
Income tax	Tax-free band: EUR 11,600 Entry rate: 11% Top rate: 45% Exceptional high-income contribution: 3% / 4% Employment social charges: Material Investment flat tax (PFU): 31.4%	Personal income tax: 23% - 43% Regional surtax: 1.23% - 3.33% Municipal surtax: 0% - 0.9% Employee social security: around 10% Tax on wages: withholding applies
Corporate tax	Standard corporate tax: 25% SME reduced rate: 15% on first EUR 42,500 Social contribution on CIT: 3.3% IP Box reduced rate: 10% QDMTT / Pillar Two: 15%	Corporate income tax: 24% IRAP: 3.9% Financial sector IRAP: higher Digital services tax: 3%
Capital gains tax	Securities PFU: 31.4% PFU income-tax component: 12.8% PFU social levies: 18.6% Real-estate income tax: 19% Full property IR exemption: 22 years Full property social exemption: 30 years	Capital gains tax: 26% Government bonds: 12.5% Real estate gains: 0% / 26% Crypto gains: 33%
Dividend tax	Resident PFU total: 31.4% PFU income tax: 12.8% PFU social levies: 18.6% Non-resident individual WHT: 12.8% Progressive election: Optional Common dividend allowance on progressive route: 40%	Dividend withholding tax: 26% Foreign dividends: 26% Corporate participation exemption: 95%
Wealth tax	General net wealth tax: 0% IFI threshold: EUR 1,300,000 EUR 800,001 to EUR 1,300,000: 0.50% EUR 1,300,001 to EUR 2,570,000: 0.70% EUR 2,570,001 to EUR 5,000,000: 1.00% EUR 5,000,001 to EUR 10,000,000: 1.25% Above EUR 10,000,000: 1.50%	Net wealth tax: 0% IVIE: 1.06% IVAFE: 0.2% IVAFE on privileged regimes: 0.4%
Inheritance / estate tax	Spouse / PACS partner: Exempt Children / parents: 5% - 45% Child allowance: EUR 100,000 Siblings: 35% / 45% Distant relatives / unrelated: 55% / 60%	Spouse and direct descendants: 4% Brothers and sisters: 6% Other relatives up to 4th degree: 6% Other beneficiaries: 8%
VAT / GST / sales tax	VAT: 20% / 10% / 5.5% / 2.1%	VAT: 22%

Who wins on each tax

Personal income taxItaly

Italy's national IRPEF tops at 43% before local surtaxes; France reaches 45% and can add a 3%/4% exceptional contribution.

Corporate taxFrance

France's general corporate rate is 25%; Italy combines 24% IRES with generally 3.9% IRAP.

Capital gains taxItaly

Italy generally taxes financial gains at 26%; France's standard securities PFU is 31.4% from 2026.

Wealth taxItaly

Italy has no general net wealth tax and uses IVIE/IVAFE on foreign assets; France levies IFI of 0.5% to 1.5% on taxable real-estate wealth above EUR 1.3 million.

The verdict

Both countries tax ordinary residents on worldwide income at high progressive rates: France 0% to 45% plus possible high-income contribution, Italy IRPEF 23% to 43% plus local surtaxes. Neither is a low-tax salary move.

The structural split is wealth and investment design. France's IFI taxes non-professional real estate above EUR 1.3 million at 0.5% to 1.5%, and most securities income takes a 31.4% PFU. Italy has no general net wealth tax, instead charging IVIE and IVAFE on foreign real estate and foreign financial assets, and it generally uses a 26% substitute tax on financial income.

Choose France for a large domestic market and household-quotient payroll. Choose Italy when the 26% financial rate, 4%/6%/8% succession scale, forfettario or the EUR 300,000 new-resident lump-sum actually applies.

How to read this comparison

France and Italy look similar from a distance: large EU economies, progressive personal tax, 20%-plus VAT and serious payroll charges. The useful comparison is how each country taxes stored wealth and financial income.

France concentrates annual wealth tax on real estate. IFI applies when net taxable non-professional real estate exceeds EUR 1.3 million, with a progressive scale from 0.5% to 1.5%. Listed shares and ordinary cash are generally outside that base. Investment income is a different story: from 2026 the default PFU on dividends, interest and securities gains is 31.4%, unless the household elects the progressive income-tax scale. Corporate tax is 25%, with a 15% SME band on the first EUR 42,500. Standard VAT is 20%. Inheritance tax can reach 60%. Exit tax can apply to unrealised gains on qualifying shareholdings when residence ends.

Italy does not levy a broad domestic net wealth tax. What it does levy is IVIE on foreign real estate and IVAFE on foreign financial assets, so a globally invested Italian resident is not wealth-tax free. Most dividends and capital gains take a 26% substitute tax. Crypto is generally 33% from 2026. Companies pay 24% IRES plus generally 3.9% IRAP. VAT is 22%. Inheritance and gift tax is comparatively mild at 4%, 6% or 8% with relationship-based allowances.

Special regimes then decide many relocation files. Italy's forfettario can replace ordinary IRPEF for qualifying small businesses. The new-resident lump-sum is EUR 300,000 a year from 1 January 2026 on eligible foreign income. France's household quotient can help families in a way Italy's local IRPEF surtaxes do not.

Choose France when the reason is French work, family or a business that needs that market, and keep IFI and PFU in the model. Choose Italy when 26% financial tax, succession, IVIE/IVAFE exposure or a real substitute-tax regime is the point of the move.

Which one fits you

🇫🇷 Choose France if you're a…

Households using France's family quotient
Groups that need the French consumer market
Residents whose wealth is financial rather than French real estate

🇮🇹 Choose Italy if you're a…

Investors comparing 26% substitute tax with French PFU
Qualifying new residents considering the lump-sum
Families using Italy's 4%/6%/8% inheritance scale

Frequently asked questions

Is France or Italy better for investors?

Italy is usually lighter on standard financial gains and dividends at 26%, against France's 31.4% PFU. France can still suit investors whose assets sit outside IFI and who prefer French market infrastructure.

Does Italy have a wealth tax like French IFI?

Italy has no general net wealth tax and no IFI-style tax on all real estate. Residents can still pay IVIE on foreign real estate and IVAFE on foreign financial assets.

Which country is better for inheritance?

Italy is usually lighter, with 4%, 6% or 8% rates by relationship. French inheritance tax ranges from 5% to 60% depending on the heir class and allowances.