Before 31 December: Seven Deadlines Worth Real Money

Which deadlines matter, and what are they worth?

We have put them in calendar order, each with a worked example in euros, calculated by us on the rules in force in October 2026, and the rule that governs it. Your own case depends on your income and your expenses.

Pension fund: how much do you save by paying in before 31 December?

Pension fund contributions are deductible from income up to €5,300 a year from 2026 (until 2025 the limit was €5,164.57). Your own contributions and your employer's count towards the limit; TFR (severance pay) paid into the fund does not. The limit is annual: what you do not use in 2026 cannot be carried over to 2027.

An example. This year you and your employer have paid in €2,500 between you, which leaves €2,800 deductible. With income between €28,000 and €50,000, taxed at the 33% rate of IRPEF (Italian personal income tax), paying it in before the year ends is worth €924 less tax. At the 23% rate it is €644, at 43% it is €1,204. These figures cover IRPEF only: the deduction also lowers the regional and municipal surcharges.

When the benefit is paid, the deducted part bears a withholding tax of between 15% and 9%, less than your rate today in any case. Within the same limit you can also pay in for a dependent family member.

What to check: how much you have already paid in during 2026, and by what date the fund must receive the transfer for it to count this year. What it is worth in your case is worked out by the tax advantage simulator. If you are over 50, read also whether a pension fund is still worth it; if the "wealth tax" on pension funds worries you, the numbers are here.

Paid in more than the limit in 2025? Tell your fund by 31 December 2026

If in 2025 you paid more than €5,164.57 into a pension fund, or did not deduct part of your contributions, the law requires you to tell the fund the amount not deducted by 31 December of the year after the payment, or earlier if in the meantime you become entitled to the benefit. For 2025 contributions the date is 31 December 2026.

Why it pays: you made those contributions out of income that had already been taxed. If the fund knows, it leaves them out of the taxable part of the benefit; if it does not, it taxes them as if you had deducted them. With €8,000 paid in during 2025, the contributions not deducted come to €2,835.43: reporting them avoids between €255 (at the 9% withholding rate) and €425 (at 15%) of future tax.

What to check: how much you actually deducted in your tax return, and the fund's form for reporting it.

Stock market losses from 2022: why must they be used by 31 December 2026?

Capital losses on shares, bonds and other securities can be offset against gains of the same kind in the year they arise and the four following years: those realised in 2022 expire on 31 December 2026. On €10,000 of losses used, you save up to €2,600 of tax (26%). Gains on funds and ETFs, however, cannot absorb them. When it makes sense to sell in order to recover them, and when it does not, we explain in Capital Losses in Italy Cut Your Tax, but They Expire; the capital loss recovery simulator sorts them by year of expiry.

Deductible expenses: why does how you pay matter, not just how much?

Expenses that qualify for the 19% tax credit (detrazione, an amount taken directly off the tax due) count in the year you pay them: those paid by 31 December 2026 go into the tax return filed in 2027; those paid in January slip by a year.

And they count only if you pay by bank transfer, credit or debit card, or cheque: paid in cash, the tax credit is lost. The exceptions are medicines, medical devices and services from public facilities or private ones accredited with the National Health Service, which you can also pay in cash. A €150 visit to a private, non-accredited doctor, paid in cash, costs €28.50 of lost tax credit.

The limits are those of article 15 of the Consolidated Income Tax Act (TUIR); the school ceiling rose from €800 to €1,000 for expenses from 2025 (Law 207/2024, para. 13). We have explained the policies in Life insurance and protecting your family.

Income above €75,000: is there a cap on tax credits?

Yes, for expenses from 2025. With total income above €75,000, calculated without the home you live in, deductible expenses count only up to a cap: a base amount multiplied by a coefficient that depends on your dependent children.

Outside the cap are medical expenses, investments in innovative start-ups and SMEs, and mortgage interest, insurance premiums and building-work instalments linked to contracts or expenses up to 2024.

What it means in December: if the cap is already full, bringing an expense forward gives no extra tax credit. Above €120,000 of income the 19% tax credits (except medical expenses and mortgage interest) shrink until they reach zero at €240,000; above €200,000, from 2026, a further €440 is taken off. The income tax simulator applies all three limits.

Home renovations: why is a payment in December worth more than one in January?

For renovation work on the home you live in, if you own it or hold a property right over it, the tax credit is 50% on expenses paid in 2026 and drops to 36% on those paid in 2027. On other homes it goes from 36% to 30% (Law 199/2025, para. 22, which amends art. 16 of Decree-Law 63/2013). The spending limit is €96,000 per property unit and the tax credit is spread over ten annual instalments.

On €30,000 of work on the home you live in:

• paid by 31 December 2026: €15,000 of tax credit, €1,500 a year for ten years;
• paid in 2027: €10,800, €1,080 a year;
• difference: €4,200.

What counts is the date of payment, made with the dedicated bank transfer for building bonuses. If your income exceeds €75,000, each annual instalment falls within the cap on tax credits.

Performance bonus: take it in cash or convert it?

If you work for a private company and a company or local agreement provides for a performance bonus (premio di risultato), in 2026 and 2027 the bonus bears a substitute tax of 1% up to €5,000 (in 2025 it was 5% up to €3,000). It applies to anyone whose employment income in 2025 was up to €80,000.

If the agreement allows it, you can convert the bonus. Into welfare (the goods and services set out in the law), it bears no tax. Into a pension fund, it bears no tax either now or when the benefit is paid, and it does not use up the €5,300 deductible limit. On a €5,000 bonus: €50 of tax in your pay packet, nothing if you convert it. At 1% the immediate difference is small; in a pension fund, though, that €5,000 will not bear the 15% to 9% withholding tax when the benefit is paid.

The deadline for choosing is set by your employer: ask the HR office. The company's point of view, contributions included, is in Keeping staff with welfare and TFR.

Shares in a company: is it worth revaluing them by 30 November?

Only if you plan to sell them and paid little for them. The law lets you replace the tax cost of shares held on 1 January with their value at that date, by paying a substitute tax on the whole value. From 2026 the tax is 21% instead of 18%. For shares held on 1 January 2026, the sworn valuation and the payment (or the first of three annual instalments) must be made by 30 November 2026.

An example: shares valued at €200,000 that cost €10,000. Selling them without revaluation, you pay 26% on the €190,000 gain, that is €49,400. With the revaluation you pay 21% of €200,000, that is €42,000: €7,400 less, from which the cost of the valuation must be deducted.

The rule of thumb, calculated by us: 21% on the whole value costs less than 26% on the gain only if the original cost is below roughly 19% of the current value (5 divided by 26). Above that threshold the revaluation costs more than it saves. And if you then do not sell, you have paid the tax anyway.

What to check in January 2027?

1. Home renovations: from 1 January the tax credit drops to 36% on the home you live in and to 30% on other homes.
2. Stock market losses: capital losses from 2023 expire on 31 December 2027.
3. Pension fund: the €5,300 limit also applies in 2027; spreading contributions over the year avoids the December rush.
4. Performance bonus: the 1% tax up to €5,000 also applies to bonuses paid in 2027.
5. New rules: from 1 January the new Consolidated Income Tax Act applies, which reorganises the rules and renumbers the articles cited here. The 2027 Budget Law is being debated in Parliament: before planning, check the text as approved.

Glossary

• Deduction (deduzione): an amount taken off income before tax is calculated; it is worth as much as your top tax rate (for example, pension fund contributions).
• Tax credit (detrazione): an amount taken directly off the tax due; for many expenses it is 19% of the expense.
• Traceable payment: bank transfer, debit or credit card, prepaid card, cheque; cash is not.
• Capital loss (minusvalenza): the loss realised by selling a security for less than you paid for it; it can be offset against gains of the same kind for four years after the one in which it arises.
• Revaluation of shareholdings (rideterminazione): the option to replace the tax cost of shares or company holdings with their value on 1 January, by paying a substitute tax.
• Performance bonus (premio di risultato): the variable part of pay linked to gains in productivity or profitability, provided for by a company or local agreement.

Sources

• Legislative Decree 252 of 5 December 2005, art. 8, paragraphs 4 and 5 (deduction, €5,300 limit from 2026, reporting contributions not deducted) and art. 11, paragraph 6 (taxation of benefits) (in Italian).
• Law 199 of 30 December 2025 (2026 Budget Law), art. 1: paragraph 3 (33% IRPEF rate), paragraph 4 (€440 cut above €200,000), paragraph 9 (performance bonuses at 1% up to €5,000), paragraph 22 (building bonus rates), paragraph 144 (revaluation at 21%), paragraph 201 (€5,300 limit) (in Italian).
• Law 207 of 30 December 2024, art. 1, paragraph 13 (school expenses up to €1,000) and paragraph 30 (annual revaluation of shareholdings) (in Italian).
• Law 160 of 27 December 2019, art. 1, paragraphs 679-680 (traceability of deductible expenses) and paragraph 762 (IMU payment) (in Italian).
• Law 208 of 28 December 2015, art. 1, paragraphs 182-187 (performance bonuses and their conversion) (in Italian).
• Law 448 of 28 December 2001, art. 5 (revaluation of shareholdings) (in Italian).
• Presidential Decree 917 of 22 December 1986 (TUIR), art. 15 (tax credits for expenses), art. 16-ter (cap on tax credits), art. 68, paragraph 5 (carrying forward capital losses) (in Italian).
• Decree-Law 63 of 4 June 2013, art. 16 (tax credit for home renovation) (in Italian).
• Legislative Decree 117 of 19 June 2026 (new Consolidated Income Tax Act, applicable from 1 January 2027) (in Italian).
• COVIP, FAQ on tax treatment (TFR excluded from the deduction) (in Italian).