Tipping in Italy is not compulsory, in fact the majority of Italians don't generally tip huge amounts, that's if they tip at all. But, as tourists, you will be expected to leave a tip in Italian restaurants, when touring with a guide or taking a taxi ride.
In many establishments in Italy they don't even give you the option to tip, as they already include tips in your bill in the form of service and cover charges that can increase the cost of your meal by 20% or more. Some people think that the service charge goes to the people who wait your table, but unfortunately in the majority of cases it goes straight to the owner. We recommend that you only tip when you receive good service and below we have listed some rough guidelines.
In sit-down restaurants it's customary to leave a 10 - 15% tip. For Taxi Drivers a tip of around 5-10% would be ideal, although this depends on the city. A water-taxi in Venice is already so expensive that a 10% tip would be more than a taxi ride would cost in other parts of Italy.
In hotels if the concierge has been of assistance to you and made your stay a pleasant one a tip of 10 - 20 € is customary, while the chambermaids are happy with a 1 or 2€. For tour guides it depends on the kind of service provided, but again typical 5 - 10% is sufficient.
When tipping in Italy, try to avoid taking out your loose change and leaving a Euro or less to your service provider as many would take this as an insult, as the cost of living is quite high in Italy and nominal tips like this have no real value to anyone. So better not to leave any tip at all in these cases.