Flat-rate tax regime in Italy: a 2026 guide for founders

Your first client wants an invoice. You don’t have a partita IVA yet. For most people who live in Italy and start alone, freelancing while an idea takes shape, the answer is the flat-rate tax regime in Italy, the regime forfettario: one tax of 15%, or 5% for a new activity, on a fixed share of what you collect, up to €85,000 a year.

We’ll go through who qualifies in 2026 and what tax and INPS come to on €40,000 of revenue, then opening costs, the mistakes that cost money and the point where a company makes more sense. Plenty of founders bootstrap this way, paying for the early months with client work. New to all of this? Start from our beginner’s map, from zero to a first round.

What is the flat-rate tax regime in Italy?

It’s a simplified regime for individuals with a partita IVA, the VAT number anyone self-employed needs, set by Law 190/2014. You don’t add up costs. The law assumes a fixed share of what you collect is profit (the coefficient), and you pay one substitute tax on it in place of income tax and the regional and municipal surcharges. The only deduction is the compulsory pension contributions you’ve paid. And it runs on cash: what counts is money received in the year, not money invoiced.

Who can use it in 2026

The ceiling is €85,000 of revenue or fees collected in the previous year. Pass it in 2026 and you’re out from 2027; pass €100,000 and you’re out at once, with VAT due from the invoice that crossed the line. Even under the ceiling, these shut the door:

• Employee or pension income above €35,000 in 2025. The usual limit is €30,000; it was raised for 2025 and 2026 only, and a job that ended by 31 December doesn’t count.
• Working mostly for your current employer, or for one you had in the previous two years.
• Control of an SRL doing business directly or indirectly linked to yours.
• Living outside Italy. A resident of another EU or EEA country who earns at least 75% of their income here is the exception.

A salaried job on the side is fine within those limits. When to quit your job for a startup covers the rest of that decision.

No VAT on your invoices, but they must be electronic

Forfettari don’t charge VAT and can’t deduct the VAT they pay. Italian business clients don’t apply the ritenuta d’acconto (the withholding tax usually taken from a freelancer’s fee), so the invoice total is what you receive. Since 1 January 2024 every forfettario has had to send e-invoices through the SdI, the tax authority’s exchange system. An invoice above €77.47 without VAT also carries a €2 stamp duty, paid quarterly.

How much tax: the coefficient, then 15% or 5%

Two numbers decide your tax. The first is the coefficient, tied to your ATECO code, the activity code you pick when you open.

In 2026 there’s a wrinkle. Italy adopted a new classification, ATECO 2025, on 1 January 2025 and put it into use on 1 April, but the coefficients haven’t caught up. Until new ones are approved, D.Lgs. 81/2025 keeps the old table, read through the ATECO 2007 code that matches your activity. In early October 2026 that was still the rule.

What you do	Example	Coefficient	Taxable income on €10,000 collected
Professional, scientific, technical, health, education, financial and insurance services	Consultant, web designer	78%	€7,800
Construction and real estate	Builder, estate agent	86%	€8,600
Commercial intermediaries	Sales agent	62%	€6,200
Street trade in non-food goods	Market stall	54%	€5,400
Wholesale and retail trade, food and drink industries, accommodation and catering	Online shop, café	40%	€4,000
All other economic activities	Many industrial and service activities	67%	€6,700

The second number is the rate: 15%, or 5% for the year you start and the four after it, if three conditions hold. No artistic, professional or business activity in the previous three years. No mere continuation of earlier work, as an employee or as a freelancer (a compulsory traineeship, the praticantato some professions require, is the exception). And if you take over someone else’s business, its revenue the year before stayed within €85,000.

Timing matters in October. The five years start with the tax year you begin in, so opening in December 2026 spends a 5% year on a few weeks of revenue. No clients yet? A January start gives you five full years. Just don’t stretch it the other way: you have 30 days from the day you start working.

INPS contributions: gestione separata or artigiani and commercianti?

INPS, the state pension and social security body, takes more than the tax does. Which fund you pay into depends on what you do.

Freelancers and consultants without a professional fund of their own pay into the gestione separata: 26.07% in 2026 of the income worked out with the coefficient, 25 points of which go to the pension. It’s 24% if you already pay into another compulsory scheme or you’re retired. There’s no fixed minimum (below €18,808 of income you just earn less than a full year of pension credit), and you pay on the same dates as your income tax.

Artisans and traders pay into INPS artigiani or commercianti, at 24% and 24.48%. The catch is the minimum: €4,521.36 a year for artisans and €4,611.64 for traders, in four instalments (18 May, 20 August and 16 November 2026, then 16 February 2027), even in a quiet year. Forfettari can cut that by 35%, but INPS won’t do it for you. If you register in 2026, ask the day it comes through. The 50% cut you may read about was only for first registrations in 2025.

A worked example with invented numbers

Imagine Sara, a web designer in Bologna. She finished her master’s in December, opens her partita IVA in January and has never freelanced, so the 5% rate applies. In a normal year she collects €40,000.

Step	At 5%	At 15%
Revenue collected	€40,000	€40,000
Income after the 78% coefficient	€31,200	€31,200
INPS gestione separata, 26.07%	€8,134	€8,134
Tax base: income minus the INPS paid in the year	€23,066	€23,066
Substitute tax	€1,153	€3,460
Tax plus INPS	€9,287 (23% of revenue)	€11,594 (29%)

Year one is where people get caught out. No advance payments are due in your first year, so Sara pays no tax or INPS while she earns. With no contributions to deduct, her first-year tax is 5% of €31,200: €1,560. Then, in June of year two (20 July in 2026, after an extension), the balance for year one arrives, about €9,700 between tax and INPS, plus the first advance on year two. All at once.

Our rule of thumb, not an official figure: in year one, move a third of every payment to a separate account. Starting a startup with no money has more on making that year last.

How to open a partita IVA, and the mistakes to avoid

Steps and costs

1. Get a digital identity (SPID, CIE or CNS) and, if you’re new to Italy, a codice fiscale, your tax code.
2. Choose your ATECO code with a commercialista, an Italian chartered accountant. It sets your coefficient and often your INPS fund.
3. Freelancers file form AA9/12 with the Agenzia delle Entrate within 30 days of starting. Online it’s free and the number comes at once. Then they register with the gestione separata.
4. Artisans and traders use ComUnica instead: one filing with the Registro Imprese, the business register kept by the chambers of commerce, that also reaches the Agenzia delle Entrate, INPS and INAIL. It needs a digital signature.
5. Set up e-invoicing before the first invoice goes out.

A ComUnica for an individual business costs €17.50 in stamp duty and €18 in fees, plus the 2026 chamber fee: €53 in the special section for artisans and small businesses, €120 in the ordinary one. The accountant is the real cost, so agree a yearly fee first.

Mistakes that cost money

• Calling regular work occasional. Tax law treats self-employment as a profession when it’s habitual, even alongside a job. Once clients keep coming back, the 30 days are running.
• Invoicing your old employer. If most of your revenue comes from a company that employed you in the last two years, you lose the regime, not just the 5%.
• Assuming a move makes you new. In answer 197 of 20 April 2022, the Agenzia delle Entrate looked at a designer who had lived abroad for over three years and wanted to move to Italy with the same clients. Regime, yes. The 5%, no: the activity simply carried on.
• Forgetting VAT on foreign purchases. Ads or software bought from abroad can leave you owing Italian VAT (22%) through reverse charge, with no deduction, due by the 16th of the second month after each quarter.
• Spending year one’s money. See Sara’s June.

When to move to an SRL or SRLS

A partita IVA is you, and nobody can buy 20% of it. When a co-founder joins or an angel asks for equity, a share of the company, you need a company: usually an SRL, Italy’s limited liability company. Startup support works the same way: an innovative startup must by law be a capital company (or a cooperative), so calls like the 2026 Lombardy grant for innovative startups aren’t open to a partita IVA. Our guide to innovative startup status lists the requirements.

You can keep the partita IVA alongside, as long as the SRL you control doesn’t do linked business. As for costs, an ordinary SRL runs to roughly €2,700 to €4,600 in its first year, notary included, according to NotaiOnline. An SRLS, the simplified version, skips the notary fee, the stamp duty and the secretarial fees, so about €630 to €660 plus the capital.

The catch with an SRLS? Only individuals can set one up, capital stays between €1 and €9,999.99, and the deed follows a standard model you can’t change. Fine for two founders, tight once investors want their own clauses. How much money you need to start a startup covers the rest of the budget, and opening a company in Italy as a foreigner the extra steps if you’re not Italian.

Checklist before your first invoice

1. Check the four exclusions: 2025 employee income, recent employers, a linked SRL, residence.
2. Agree on your ATECO code and write down its coefficient.
3. Time the start so you don’t waste a 5% year: January beats December.
4. Open within 30 days of starting: AA9/12 for freelancers, ComUnica for artisans and traders.
5. Register with INPS and, as an artisan or trader, ask for the 35% cut.
6. Set up e-invoicing and remember the €2 stamp duty above €77.47.
7. Open a separate account for tax and INPS before the first payment lands.

This article is general information, not legal or tax advice. Rules change: check the Agenzia delle Entrate and INPS sources or ask a commercialista before you open your partita IVA.