Italy's regime forfettario: the €85,000 flat-tax scheme for freelancers, and how it really works
Most Italian freelancers start on the regime forfettario — a flat substitute tax of 15% (just 5% for the first five years) on a fixed share of revenue, with no VAT charged. Here are the thresholds, the profitability coefficient, and the trade-offs.
This article is general information, not tax advice. Regulations change — verify the current rules with the official sources below before acting.
The regime forfettario is how most Italian freelancers (and small partite IVA) start: one flat tax, no VAT to charge, and much lighter bookkeeping. It's a genuinely good deal — but only if you understand the ceiling, the coefficient, and what you give up.
The €85,000 ceiling
You can use the forfettario while prior-year revenue stays at or under €85,000. Between €85,000 and €100,000, you leave the scheme from the following year. Cross €100,000 in-year and you exit immediately — VAT applies to the operations above the limit and ordinary IRPEF taxation applies to the whole year. Note this is the scheme's ceiling: in Italy you have a partita IVA from day one, so there's no separate VAT-registration threshold.
The flat tax and the profitability coefficient
Tax is a flat imposta sostitutiva of 15%, cut to 5% for the first five years of a genuinely new activity (strict conditions apply). Crucially, it's not charged on all your revenue — it's charged on a taxable share set by the coefficiente di redditività for your ATECO code, which ranges 40%–86% (professional services are typically 78%). Actual costs are not deductible; the only deduction is the social contributions you pay.
Social contributions and the trade-off
Professionals without a dedicated fund pay INPS Gestione Separata — around 26.07% (or 24% if already covered by another pension scheme) on the taxable income, while artisans and traders pay the fixed artigiani/commercianti contributions instead.
The trade-off to weigh: forfettario means no VAT charged and no input VAT recovered, and no deduction of real expenses. If your costs are low (you mostly sell your time), it's usually a clear win; if you have heavy expenses or want to reclaim VAT, the ordinary regime can beat it. Run both once before you commit.
General information about the Italian regime forfettario, current as of the review date above, and not tax advice. Thresholds, rates and coefficients change — confirm current figures with the Agenzia delle Entrate, INPS, or a qualified commercialista.
Frequently asked questions
What is the turnover limit for the regime forfettario?
€85,000 of prior-year revenue. Between €85,000 and €100,000 you leave the scheme from the following year; if you exceed €100,000 in-year you exit immediately, with VAT and ordinary IRPEF applying. It is the scheme's ceiling, not a VAT-registration threshold — in Italy you hold a partita IVA from day one.
How much tax do you pay on the forfettario?
A flat substitute tax (imposta sostitutiva) of 15%, reduced to 5% for the first five years of a genuinely new activity. It's charged not on all your revenue but on a taxable share set by the coefficiente di redditività for your ATECO activity code (ranging 40%–86%). Actual expenses aren't deductible; only social contributions paid in the year reduce the base.