Law No. 120 dated 8th August 2025, was published in the Official Gazette No. 184 dated 9th August 2025, amending Law No. 111 dated 9th August 2023, on “Authorisation to the Government for tax reform”.

Law No. 111 dated 9th August 2023, authorised the Government to adopt one or more legislative decrees revising the tax system in accordance with constitutional principles and European Union and international law, based on the general and specific principles and guidelines set out in the Law itself.

Initially, the Government had 24 months to complete the regulatory framework, meaning that the reform had to be completed by 29th August 2025. This deadline has recently been extended by one year (29th August 2026), as a result of the amendment provided for by Law No. 120 dated 8th August 2025. 120.

A comprehensive reorganization of the provisions governing the tax system is also planned, through the drafting of consolidated texts. In the initial version, these texts were to be approved by 29th August 2024; the deadline was ultimately extended to 31st December 2026, as a result of the extension of the aforementioned Law No. 120/2025. 120/2025.

In addition, a tax code containing the rules governing individual taxes will be prepared in order to simplify the tax system and increase the clarity and accessibility of tax regulations. This objective must be implemented within 12 months of the date of entry into force of the last of the legislative decrees relating to the reform.

It should be noted that a number of legislative decrees have been preliminarily approved containing provisions on:

• the tertiary sector, business crises, and VAT;
• IRPEF (Personal Income Tax) and IRES (Corporate Income Tax), international taxation, inheritance and gift tax, registration tax, as well as amendments to the Taxpayers’ Charter and the Consolidated Tax Laws
• regional and local taxes and regional fiscal federalism.

A special commission has recently been set up, whose members have been appointed by the Minister of the Higher Council of Economy and Finance to draft the new body of legislation.