Regime Forfettario (Italy)

The regime forfettario is Italy’s simplified tax scheme for individuals who run a small business or work as a freelancer (a “partita IVA”). Instead of taxing your real profit, it assumes a fixed percentage of your revenue is profit and applies one flat tax to that amount. You skip VAT on your invoices, keep lighter records, and file far less paperwork than under the ordinary regime.

It matters when you move because the scheme is generous but narrow. There is a turnover cap — usually in the low tens of thousands of euros, and it shifts over time — and the headline tax rate is reduced, sometimes lower still for the first few years of a new business. If you are weighing a move to Italy, or comparing it with staying abroad, this is often the biggest single factor in your take-home. Model the two side by side in our forfettario calculator.

The catch people miss is that it is tied to where you are taxed, not just where you registered. Eligibility depends on your tax residency and on rules that exclude people whose income comes mainly from one former employer or from a controlled foreign company. If you still earn from clients or a base in another country, watch out for permanent establishment — a foreign presence can pull that income back into another country’s net, and a flat Italian rate does not always beat a territorial taxation setup elsewhere.

And there are exits people don’t plan for. Cross the turnover cap, trigger an exclusion, or break a condition, and you can be pushed back to the ordinary regime, sometimes retroactively for the whole year. Treat the flat rate as a rule with conditions, not a permanent perk.

This is general information, not advice — confirm the current thresholds, rates and eligibility with the official Agenzia delle Entrate source or a qualified Italian commercialista before you act.

Where you’ll meet this

• Opening a “partita IVA” in Italy, where you tick the box for the forfettario regime when you register.
• Sitting with a commercialista who runs both the flat-rate and ordinary numbers to see which leaves you more.
• Reviewing your turnover near year-end to check you haven’t crossed the cap and lost the scheme for next year.