LumenWho can use Italy's forfettario flat-rate tax regime for the self-employed?
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Italy's forfettario regime lets individuals in business or a profession with revenue up to €85,000 in the previous year pay a 15% substitute tax instead of IRPEF, regional and municipal surcharges and IRAP. It applies to a fixed share of revenue set by activity code. New activities can pay 5% for their first five years if conditions are met.
Key facts
| What | The law says | Source |
|---|---|---|
| Who | Individuals carrying on a business, art or profession | Law 190/2014, art. 1(54) |
| Revenue limit | Revenue or fees in the previous year, annualised, not over €85,000 (all activities added together) | art. 1(54)(a), (55)(b) |
| Staff limit | Spending on employees and collaborators in the previous year not over €20,000 gross | art. 1(54)(b) |
| Tax rate | 15% substitute tax, replacing IRPEF, regional and municipal surcharges and IRAP | art. 1(64) |
| Taxable base | Revenue or fees received times a profitability coefficient set by ATECO activity code (annex 4); mandatory social contributions are deductible | art. 1(64) |
| Start-up rate | 5% for the year the activity starts and the next 4, if conditions are met | art. 1(65) |
| Employment income | Excluded if employment income the year before was over €30,000 (€35,000 for 2025 and 2026), unless the job has ended | art. 1(57)(d-ter); Law 207/2024, art. 1(12) |
| Over €100,000 | The regime ends in the same year; VAT is due from the transaction that crosses the limit | art. 1(71) |
| VAT and withholding | No VAT charged on domestic transactions and no VAT payments, except on transactions where you are the party liable for VAT; fees are not subject to withholding tax | art. 1(58)–(60), (67) |
Who can’t use it
The law excludes (art. 1(57)):
- people using special VAT regimes or other flat-rate income regimes;
- non-residents, except residents of an EU or EEA state with adequate exchange of information who produce at least 75% of their total income in Italy;
- people who mainly sell buildings, building land or new means of transport;
- people who also hold shares in partnerships or family businesses, or control an SRL working in related activities;
- people who work mainly for an employer they have or had in the two previous years (or related parties), except after a compulsory professional traineeship;
- people whose employment income the year before was over €30,000 — €35,000 for 2025 and 2026 — unless the employment has ended.
The 5% start-up rate
The law sets 5% instead of 15% for the year a new activity starts and the four following, if (art. 1(65)):
- you did not carry on an artistic, professional or business activity in the three years before;
- the new activity is not a mere continuation of previous employment or self-employment (a compulsory traineeship doesn’t count);
- if you take over someone else’s activity, its revenue in the previous year was within the €85,000 limit.
Starting and leaving
If you are starting out, you join by stating in the VAT start-of-activity declaration that you expect to meet the requirements (art. 1(56)). The regime stops from the following year if you no longer meet a condition, and immediately, in the same year, if revenue goes over €100,000 (art. 1(71)).
Sources
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