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, 85,000 euro of revenue or fees per year as the Agenzia delle Entrate states it, and it has been raised more than once, so check the figure for the year you are filing. The headline rate is a single 15% substitute tax that replaces income tax and the regional and municipal surcharges, dropping to 5% for the first five years of a genuinely new business if you meet the conditions. 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 who work mainly for a current employer or one from the previous two tax years, and people who control an S.r.l. (an Italian limited company) whose activity is tied to their own. 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 are out of the scheme from the following year. Go above 100,000 euro of revenue and you are out in that same year, with VAT due from the sale that takes you over the limit. 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.