Regime forfettario in Italy: how it works, requirements and limits

The regime forfettario (Italy’s flat-rate tax regime) is the favourable tax regime for individuals who run a business, an art or a profession with revenue or fees of up to €85,000 a year. You pay a single substitute tax (imposta sostitutiva), at 15% or at 5% in the first years, on income worked out at a flat rate, you don’t charge your clients VAT and you don’t keep accounts. Here you’ll find who can join, what rules you out, how the tax is worked out and what you still have to do.

The rules and figures are those in force in 2026, checked against the pages of the Agenzia delle Entrate (the Italian Revenue Agency) and INPS (Italy’s social security institute) on 30 September 2026.

What the regime forfettario is

It’s a regime designed for people who work on their own and invoice a small or moderate amount: the partita IVA forfettaria (a partita IVA, or Italian VAT number, under the flat-rate regime) replaces IRPEF (personal income tax), the regional and municipal surcharges and IRAP (regional tax on productive activities) with a single tax, worked out on a fixed percentage of what you collect. What you actually spend doesn’t count: what counts is your activity’s profitability coefficient (coefficiente di redditività), set by law according to your ATECO code (the activity classification).

In return for the simplicity you give up two things: you can’t deduct your actual costs and you can’t reclaim the VAT you pay on purchases.

The Agenzia delle Entrate calls it a natural regime: if you meet the requirements you’re in it without having to ask. If you’d rather be in the regime ordinario (the ordinary regime), you can leave it by opting out, which we cover further down.

Who can join: the requirements

To apply the regime forfettario in a year, in the previous year you must have met both of these conditions, set out on the Agenzia delle Entrate’s page on access to the regime:

• revenue or fees of no more than €85,000, scaled to a full year. If you have several activities with different ATECO codes, the total of all of them counts;
• spending of no more than €20,000 gross on casual work, employees and pay for collaborators, including family members who work in the business.

Even if you’re opening your partita IVA now, you can join straight away: you only have to expect to meet the requirements and say so in the start-of-activity declaration, form AA9/12. How to do it is in the guide on how to open a partita IVA.

If you forget to tick the regime on form AA9/12, you don’t lose the right to apply it, but you risk an administrative penalty of €250 to €2,000. You then confirm the requirements every year in your income tax return.

The exclusion criteria

Even with low revenue, some situations keep you out. The Agenzia calls them exclusion criteria (cause di esclusione); many people search for them as cause ostative. You can’t apply the regime forfettario if you:

• use special VAT regimes or other flat-rate regimes for working out income;
• aren’t resident in Italy, unless you live in the European Union or the European Economic Area and earn at least 75% of your income in Italy;
• sell, exclusively or mainly, buildings, building land or new means of transport;
• hold a stake in partnerships, professional associations or family businesses, or control an SRL (limited company), that carry out activities related to your own;
• work mainly for your current employer or one from the previous two years (or for parties connected to them), unless you’re starting after a mandatory traineeship;
• earned employment or similar income of more than €30,000 in the previous year. For 2025 and 2026 the limit is raised to €35,000 (legge 30 dicembre 2025, n. 199). The threshold doesn’t count if the employment has ended.

The employment income limit is the one that most often surprises people opening a partita IVA alongside a salary. It looks at the previous year’s income, not the current year’s. The full case is in the guide on partita IVA and employment.

The €85,000 limit and leaving above €100,000

As the Agenzia delle Entrate explains on the consequences of leaving the regime, the forfettario limit works on two thresholds, and the consequences differ.

Above €100,000 you leave at once. What counts is the moment you collect the invoice that takes you over the threshold: that invoice and every one after it must show VAT. If the payment arrives after the invoice was issued, you add the VAT to the invoice with a debit note. From that moment you set up the VAT registers, while the invoices issued earlier without VAT stay as they are. For income tax, though, you move back to the regime ordinario from the start of the year.

What changes after you leave is explained in the guide to the simplified and ordinary regime.

How tax is worked out in the regime forfettario

The calculation has three steps:

1. take the revenue or fees collected in the year (the cash basis applies);
2. multiply by the profitability coefficient for your ATECO code: the result is your taxable income;
3. subtract the mandatory social security contributions paid in the year and apply the substitute tax.

The coefficients range from 40% to 86% depending on the activity group. For professionals, for example, it’s 78%. The full table and how to read it are in the guide to the profitability coefficient.

The 5% rate for the first five years

According to the Agenzia delle Entrate, the substitute tax is 15%. It drops to 5% for the year you start and the four after it, if:

• in the previous three years you haven’t carried out an artistic, professional or business activity, not even as part of an association or a family business;
• the new activity isn’t a mere continuation of employment or self-employment you did before, except for a mandatory traineeship;
• if you take over someone else’s activity, their revenue for the previous year doesn’t exceed the limit for joining the regime.

An example

You’re a freelance graphic designer in your second year of activity and you qualify for the 5% rate. In the year you collect €40,000 and pay €6,000 in INPS contributions.

The contributions in the example are a round figure: the real ones depend on your INPS fund, as you’ll see further down.

VAT in the regime forfettario

In the regime forfettario you don’t charge VAT on your invoices and you don’t reclaim the VAT you pay on purchases. You also don’t do the periodic VAT settlement (liquidazione IVA) and payment or the annual VAT return (dichiarazione IVA), and you don’t record invoices issued, daily takings (corrispettivi) or purchases.

Some obligations remain:

• number and keep your purchase invoices and customs bills;
• certify your daily takings, if you sell to private customers without an invoice;
• when you’re the one liable for the tax (for example on certain purchases from abroad under the reverse charge), add the rate and the VAT to the invoice and pay it by the 16th of the second month after the quarter.

The forfettario’s invoice has a form of its own: the regime code RF19, the nature code N2.2 in place of the rate, and stamp duty (imposta di bollo) where it’s due. The details are in the guide to the invoice under the regime forfettario.

E-invoicing and other obligations

According to FiscoOggi, since 1 January 2024 every forfettario has had to issue e-invoices through the SdI (Sistema di Interscambio, the state’s e-invoicing exchange system), whatever their revenue. For those above €25,000 the obligation had already started on 1 July 2022.

On the income tax side, in the regime forfettario:

• you don’t keep the accounting records the tax rules require;
• the ISA (tax reliability indices) don’t apply to you;
• your fees aren’t subject to withholding tax (ritenuta d’acconto): you give your client a statement that the income is subject to substitute tax;
• you don’t withhold tax yourself, except on employment and similar income.

Your income tax return is filed on the modello Redditi PF (the personal income tax return), in section LM (quadro LM).

INPS contributions in the regime forfettario

The substitute tax doesn’t replace contributions: you pay them like any self-employed person with a partita IVA, and you deduct them from your flat-rate income. Where you pay them depends on your activity. The 2026 figures in the table are those of INPS circular n. 14/2026 for artisans and traders and of INPS circular n. 8/2026 for the Gestione Separata.

Only forfettario artisans and traders can ask for the 35% contribution reduction. You have to apply to INPS for it: if you started your activity in 2025 and wanted the reduction for 2026, you had to do so by 28 February 2026. Giving it up is final. There’s no reduction for the Gestione Separata.

Minimums, deadlines and reductions are explained in the guide to INPS contributions for a partita IVA.

The contributions paid in the year lower the base on which you pay the substitute tax. Keep every F24 (the unified payment form) payment receipt: you’ll need them to fill in section LM.

How to leave the regime forfettario by choice

You can give up the regime forfettario even if you meet the requirements, and move to the regime ordinario. You only have to apply the ordinary rules (the Agenzia calls this conduct that shows the choice) and state it in the first annual VAT return after that. The option lasts at least three years, then renews year by year for as long as you keep applying it.

When you leave, by choice or because you’ve gone over the limits, the VAT you didn’t reclaim on goods and services not yet used and on recent depreciable assets is adjusted in a single amount in your first VAT return under the regime ordinario.

As FiscoOggi reports, from 1 January 2027 the income tax rules move into the new consolidated act (Testo unico, D.Lgs. 19 giugno 2026, n. 117), which reorganises them. The legal references will change number; for each year’s figures, the Agenzia delle Entrate’s page on the regime forfetario is the one to rely on.

The regime forfettario is made to let you work with less paperwork: knowing its rules well is the best way to enjoy it.
💜💙 Your BravoLisa Team

This article is for general information purposes only and does not constitute professional tax, legal, or accounting advice. Every situation is different — consult a qualified professional (tax adviser, accountant, or lawyer) for advice specific to your circumstances. BravoLisa does not accept liability for decisions made based on this information.

Last updated: September 2026. Rates and thresholds can change: always check with the Agenzia delle Entrate, INPS or the relevant authority.

Sources (9)

Verified on 30 September 2026

1. Agenzia delle Entrate — Regime forfetario: Che cos'è
2. Agenzia delle Entrate — Regime forfetario: Modalità di accesso al regime
3. Agenzia delle Entrate — Regime forfetario: Semplificazioni e adempimenti
4. Agenzia delle Entrate — Regime forfetario: Conseguenze della fuoriuscita
5. Agenzia delle Entrate — Redditi Persone fisiche 2026, Fascicolo 3, istruzioni (quadro LM)
6. FiscoOggi (Agenzia delle Entrate) — Forfettari e fatturazione elettronica
7. INPS — Circolare n. 14 del 9 febbraio 2026 (artigiani e commercianti, contributi 2026)
8. INPS — Circolare n. 8 del 3 febbraio 2026 (Gestione Separata, aliquote 2026)
9. FiscoOggi (Agenzia delle Entrate) — Il nuovo Tuir è ufficiale