The Regime Forfettario is Italy’s flat-rate tax scheme for freelancers and sole proprietors, replacing progressive income tax with a single 15% rate applied to a simplified taxable base. New businesses that meet the startup conditions pay 5% for their first five years. To qualify, your collected revenue must stay at or below €85,000 in the calendar year, and several other thresholds and exclusions apply.1Agenzia delle Entrate. Flat-Rate Scheme
Who Qualifies
The revenue ceiling is €85,000 per year, measured on payments actually received rather than amounts invoiced.1Agenzia delle Entrate. Flat-Rate Scheme If you also draw a salary or a pension, your gross employment income from the previous year must stay below €35,000 for the 2025 and 2026 tax years.
A second cap catches applicants who focus only on revenue. Your total annual spending on employees, collaborators, and project-based workers cannot exceed €20,000, and that figure includes wages paid to family members working in the business. Crossing this personnel expense cap moves you into the ordinary regime even if your revenue is comfortably below €85,000.
You must be an Italian tax resident and actively engaged in a professional, trade, or artistic activity. The scheme is open to brand-new businesses and to those switching from the ordinary system, provided every threshold is satisfied at entry. Compliance is checked annually. Exceeding €85,000 in a given year pushes you into the ordinary system from the following tax year. If revenue crosses €100,000 in a single year, the exit is immediate within that same tax period, and VAT obligations begin on the invoices that pushed you over.
Exclusions That Block Access
Italian tax law lists specific disqualifying conditions, referred to as cause ostative under Article 1, paragraph 57 of Law 190/2014.2Agenzia delle Entrate. Risposta n. 398 del 23 settembre 2020 Any one of them bars entry.
Holding a stake in a partnership or professional association, or a controlling interest in a limited liability company that operates in a similar field to your freelance activity, disqualifies you. So does billing concentration with a current or former employer: if more than 50% of your annual revenue comes from someone who is your current employer, or was within the previous two tax years, the forfettario is closed to you. This rule exists to stop companies from reclassifying employees as freelancers.
Living outside Italy blocks access, with one exception. Residents of another EU or EEA member state can qualify if at least 75% of their worldwide income is generated in Italy. Certain sector activities are also out: those primarily selling real estate or vehicles, and anyone already using another special VAT regime such as agriculture or publishing.
Being caught by an exclusion retroactively can mean back-taxes, interest, and penalties, so a careful review before enrolling is worth the time.
How the Flat Tax Is Calculated
The forfettario does not track actual expenses. Instead, each business activity is assigned a profitability coefficient based on its ATECO code, and you multiply your revenue by that coefficient to get your taxable base. Everything not captured by the coefficient is assumed to have gone to costs.
The coefficients vary by industry:
- 40% for food and beverage manufacturing, hospitality, and retail trade
- 54% for non-food street vending
- 62% for trade intermediaries
- 67% for other economic activities, including manufacturing, transport, entertainment, and IT services
- 78% for professional, scientific, technical, healthcare, education, and financial services
- 86% for construction and real estate activities
The standard rate on that taxable base is 15%.1Agenzia delle Entrate. Flat-Rate Scheme New businesses can qualify for a reduced 5% rate for the first five tax years, but only if you have never previously carried on the same activity, even abroad, and the work is not simply a continuation of employment you did before.
A Worked Example
A freelance translator collects €50,000 in fees during the year. Translation sits in professional services with a 78% coefficient. The taxable base is €50,000 × 78% = €39,000. Applying 15% produces a tax bill of €5,850. Actual spending on rent, software, or travel plays no role.
The One Deduction That Counts
Social security contributions paid during the year are subtracted from the taxable base before the flat rate is applied. This is the only actual-cost deduction the scheme allows. If the translator above paid €10,000 in INPS contributions, the tax would be calculated on €29,000 instead of €39,000, for a bill of €4,350.
What the Flat Tax Replaces
The 15% substitute tax stands in for the ordinary progressive income tax (IRPEF) and also for the regional and municipal surcharges that normally sit on top of IRPEF.1Agenzia delle Entrate. Flat-Rate Scheme The Ministry of Finance confirms that forfettario participants are excluded from the regional income tax surcharge.3Dipartimento Finanze. Disciplina del Tributo Those surcharges usually add 1.2% to 3.3% depending on region and municipality, so the savings run past the flat rate itself.
Forfettario taxpayers are also exempt from IRAP, the regional tax on productive activities. VAT does not appear on your invoices, meaning you neither charge it to clients nor remit it. That simplifies cash flow, but it also means you cannot recover VAT paid on business purchases. For service businesses with low input costs the trade-off favors the forfettario; for businesses buying substantial physical inventory, the inability to reclaim VAT deserves careful calculation first.
Social Security Is Separate
The flat tax covers income tax only. Social security contributions run through INPS on their own track, and the scheme that applies depends on the nature of your work.
Gestione Separata
Freelancers not enrolled in a sector-specific pension fund — consultants, translators, IT professionals — pay into the Gestione Separata. The rate for VAT-registered professionals stands at approximately 26.07% of the taxable base as of the 2025 fiscal year.4PwC. Italy – Individual – Other Taxes These contributions are purely proportional: earn nothing, owe nothing. The 2026 rate is typically published by INPS in early January.
Artisans and Traders
If you run a trade or retail business, you fall under a different scheme with fixed quarterly payments regardless of income. For 2026, the minimum annual contribution is approximately €4,521 for artisans and €4,612 for traders.5INPS. Circolare Numero 14 del 09-02-2026 Additional proportional contributions apply once income exceeds the minimum threshold.
Artisans and traders in the forfettario can apply for a 35% reduction in total INPS contributions. The application must be submitted electronically through the INPS portal by February 28 of the year the reduction should take effect. The reduction lowers the annual fixed cost to roughly €2,900 to €3,000 but also reduces future pension entitlements. Younger workers may find the trade worthwhile; those closer to retirement often do not.
Invoicing Rules
Since January 2024, all forfettario taxpayers must issue electronic invoices through Italy’s Sistema di Interscambio (SDI), regardless of revenue level. The previous exemption for small taxpayers is gone.6European Commission. eInvoicing in Italy You will need invoicing software that generates the FatturaPA XML format and transmits it through SDI. Several free or low-cost tools exist, and many accountants include this in their service packages.
Every invoice must include a legal disclaimer indicating that the transaction is VAT-exempt under Law 190/2014. The standard Italian text reads: “Operazione senza applicazione dell’IVA, effettuata ai sensi dell’articolo 1, commi da 54 a 89, della legge n. 190 del 2014.” Most practitioners build it into their invoice template once and forget about it.
Because the invoices are VAT-exempt, a €2 stamp duty (marca da bollo) applies to every invoice where the total exceeds €77.47. On electronic invoices this is not a physical stamp; you flag it in the FatturaPA XML using the “Bollo virtuale” field. Accumulated stamp duty is settled quarterly through the Agenzia delle Entrate’s “Fatture e Corrispettivi” portal or via an F24 payment form, and the amount due is calculated automatically based on the invoices transmitted through SDI.
Payment and Filing Deadlines
Forfettario taxpayers follow the same individual payment calendar as other Italian taxpayers. The key dates for the 2026 tax year:
- June 30: pay the balance (saldo) for the previous tax year plus the first advance payment (primo acconto) for the current year
- July 31: extended deadline for the same payments, subject to a 0.4% surcharge
- October 31: electronic filing of the Modello Redditi Persone Fisiche, the annual return used by forfettario participants; the simpler Modello 730 used by employees is not available to you
- November 30: second advance payment (secondo acconto) for the current year
The advance payment system catches many first-year participants off guard. In your second year you owe both the prior year’s balance and advance payments toward the current year, all inside the same June-to-November window. Setting aside roughly 40% to 50% of each payment received throughout the year gives a reasonable cushion for combined taxes and social security.
How To Register
Before any paperwork, you need digital access to Italian government portals. The Agenzia delle Entrate requires authentication through SPID (the national digital identity), an Electronic Identity Card (CIE), or a National Services Card (CNS).7Agenzia delle Entrate. How to Access the Online Services of the Revenue Agency A SPID account requires a valid Italian identity document, your codice fiscale, an email address, and a mobile phone number.8Agenzia per l’Italia Digitale. Digital Identity If you are new to Italy, sort this out before attempting registration; it can take several days.
Choosing Your ATECO Code
Your ATECO code drives the profitability coefficient, so it directly shapes your tax bill. A freelance graphic designer classified at 78% pays tax on a very different base than one mistakenly coded under the 67% “other activities” category. If your work spans multiple activities, pick the code that best represents your primary revenue source. A commercialista can help if the classification is ambiguous.
Filing Modello AA9/12
The formal registration document is Modello AA9/12, used by individuals to declare the start, modification, or cessation of a VAT-registered activity.9Agenzia delle Entrate. Partita IVA Persone Fisiche (Modello AA9/12) Download the current version from the Agenzia delle Entrate.10Agenzia delle Entrate. Modello AA9/12 – Dichiarazione di Inizio Attivita, Variazione Dati o Cessazione Attivita ai Fini IVA Inside the form, explicitly select the forfettario option in the Regimi Agevolati section. Missing that checkbox defaults you into the ordinary regime, and correcting it later means avoidable bureaucracy.
You can submit the completed form through the Comunica electronic portal, which handles filings for the business register and social security in one step. A digital signature (Firma Digitale) is generally required. Once processed, the system issues your Partita IVA, the unique VAT identification number that appears on every invoice you issue.
PEC and Chamber of Commerce
All Italian businesses, including sole proprietorships, must have a Posta Elettronica Certificata (PEC) address, a certified email that acts as your official digital domicile.11Camera di Commercio Milano Monza Brianza Lodi. Certified Email (PEC) It is separate from your regular email and is legally equivalent to registered mail. Providers charge roughly €5 to €15 per year.
If your activity qualifies as an artisan or trade business rather than a pure professional service, you must also register with the local Chamber of Commerce (Camera di Commercio).12Camera di Commercio Milano Monza Brianza Lodi. The Craft Business Section of the Business Register That registration carries an annual fee and triggers enrollment in the artisan or trader INPS scheme with its fixed quarterly payments. Professionals providing intellectual services, such as accountants, architects, consultants, and developers, generally do not register with the Chamber of Commerce and pay only the proportional Gestione Separata contributions.