Italy vs Netherlands taxes (2026): 26% substitute tax versus Box 2/3

Italy vs Netherlands tax rates at a glance

Tax	🇮🇹 Italy	🇳🇱 Netherlands
Income tax	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	Bracket 1: 35.75% Bracket 2: 37.56% Bracket 3: 49.50% National insurance in bracket 1: Included 30% ruling: If eligible
Corporate tax	Corporate income tax: 24% IRAP: 3.9% Financial sector IRAP: higher Digital services tax: 3%	Profit up to EUR 200,000: 19% Profit above EUR 200,000: 25.8% Participation exemption: Often available Domestic dividend WHT: 15%
Capital gains tax	Capital gains tax: 26% Government bonds: 12.5% Real estate gains: 0% / 26% Crypto gains: 33%	Box 2 lower rate: 24.5% Box 2 higher rate: 31% Box 2 threshold: EUR 68,843 Portfolio / Box 3: 36% on deemed return Business gains: Box 1 rates
Dividend tax	Dividend withholding tax: 26% Foreign dividends: 26% Corporate participation exemption: 95%	Domestic dividend WHT: 15% Box 2 lower rate: 24.5% Box 2 higher rate: 31% Portfolio route: Often Box 3
Wealth tax	Net wealth tax: 0% IVIE: 1.06% IVAFE: 0.2% IVAFE on privileged regimes: 0.4%	Box 3 tax rate: 36% Box 3 tax-free allowance: About EUR 59,357 Classic all-assets wealth tax: Not used Primary residence: Generally outside Box 3
Inheritance / estate tax	Spouse and direct descendants: 4% Brothers and sisters: 6% Other relatives up to 4th degree: 6% Other beneficiaries: 8%	Partners and children: 10% / 20% Grandchildren: 18% / 36% Other beneficiaries: 30% / 40% Higher-rate threshold: About EUR 158,669 Partner exemption: EUR 828,035
VAT / GST / sales tax	VAT: 22%	VAT: 21%

Who wins on each tax

Personal income taxItaly

Italy's national IRPEF tops at 43% before local surtaxes; Dutch Box 1 reaches 49.50%, though the 30% ruling can change a qualifying employment case.

Corporate taxNetherlands

The Netherlands charges 19% then 25.8%; Italy combines 24% IRES with generally 3.9% IRAP.

Capital gains taxItaly

Italy's standard substitute tax on financial gains is 26%; Dutch substantial-interest gains are Box 2 at 24.5% or 31%, and portfolios may be Box 3 rather than classic CGT.

VATNetherlands

Dutch standard VAT is 21%, slightly below Italy's 22%.

The verdict

Ordinary employment is high-tax in both systems. Italy's IRPEF is 23%, 35% and 43% plus local surtaxes and INPS. Dutch Box 1 uses 35.75%, 37.56% and 49.50% in 2026, with a 30% ruling that still leaves qualifying staff inside Dutch tax.

Investment tax is the design split. Italy generally applies a 26% imposta sostitutiva to dividends and capital gains. The Netherlands does not: portfolios usually sit in Box 3 at 36% on a deemed return, while a 5% or larger holding is Box 2 at 24.5% or 31%.

Choose Italy for a 26% financial-income model, 4%/6%/8% succession rates or a qualifying lump-sum or forfettario regime. Choose the Netherlands for a staffed holding platform, and model Box 2 and Box 3 instead of converting Dutch wealth into Italian substitute tax on paper.

How to read this comparison

Italy and the Netherlands both tax residents on worldwide income, and both are used as EU company platforms. They do not tax financial assets the same way, which is why a rate table that lists “CGT” as a single number misleads.

Italy’s default for most dividends and capital gains is a 26% substitute tax, often withheld by the intermediary. Government bonds can be 12.5%. Most crypto gains are 33% from 2026. That is an actual-income tax. Employment is separate: IRPEF at 23% to 43% plus regional and municipal surtaxes, with employee INPS around 10%. Companies pay 24% IRES and generally 3.9% IRAP. VAT is 22%. There is no general net wealth tax, but IVIE and IVAFE apply to foreign real estate and foreign financial assets. Inheritance tax is 4%, 6% or 8%. New residents arriving from 1 January 2026 who qualify for the inbound lump-sum pay EUR 300,000 a year on eligible foreign income. Forfettario can replace ordinary IRPEF for qualifying small businesses.

The Netherlands splits the same economic result across boxes. Work is Box 1 at 35.75%, 37.56% and 49.50% in 2026. The 30% ruling can reduce the taxable share of qualifying salary and still leaves the person in the Dutch system. A 5% or larger shareholding is Box 2: 24.5% on the first EUR 68,843 per person and 31% above. Ordinary portfolios are usually Box 3, taxed on a deemed return at 36% above the exemption even if no gain is realised. Corporate tax is 19% then 25.8%. VAT is 21%. Inheritance tax is 10% to 40%.

A listed portfolio can be cheaper in Italy at 26% of actual income than in Dutch Box 3 in a low-yield year. A company sale of a 5%+ holding can be cheaper in Box 2 than at 26%. Neither mapping works if the person remains tax resident in the other country.

Choose Italy for substitute-tax simplicity, succession rates or a real inbound lump-sum. Choose the Netherlands for holding-company infrastructure, and price Box 2 and Box 3 as the investment system rather than looking for a 26% line that is not there.

Which one fits you

🇮🇹 Choose Italy if you're a…

Investors who want a 26% substitute tax on financial income
Families using 4%/6%/8% inheritance rates
Qualifying new residents or small businesses on Italian substitute-tax regimes

🇳🇱 Choose Netherlands if you're a…

Staffed Dutch holding or financing companies
Qualifying expats using the 30% ruling
Shareholders whose 5%+ holdings fit Box 2 better than 26%

Frequently asked questions

Is Italy or the Netherlands better for investment income?

Italy is usually simpler: 26% substitute tax on most dividends and gains. The Netherlands can be better or worse depending on whether the holding is Box 2 at 24.5%/31% or Box 3 deemed-return tax.

Does Dutch Box 3 replace Italy's 26% tax?

No. Box 3 taxes a deemed return at 36% above the exemption, not the actual dividend or gain. A 5% or larger shareholding generally leaves Box 3 for Box 2.

Which country is better for a company?

The Netherlands is often better as a holding platform at 19%/25.8% with treaty infrastructure. Italy's 24% IRES plus IRAP is a heavier operating stack unless a specific Italian regime applies.