Italy's flat tax for the self-employed: 15%, or 5% for a new activity, on revenue up to €85,000. We check eligibility, choose your activity code and calculate your real net figure including INPS.
If you are moving to Italy to work for yourself, as a freelancer, consultant or sole trader, the regime forfettario is often the most attractive way to be taxed. It replaces Italy's ordinary progressive taxes with a single flat rate of 15%, cut to 5% for the first five years of a new activity, on revenue up to €85,000 a year. It is one of the three flat tax regimes Italy offers, and for many people relocating it is the difference between a heavy tax bill and one of the lightest self-employment regimes in Europe.
This page explains how Italy self-employed tax works under the forfettario for someone arriving from abroad: the eligibility, the real cost once social security is included, and how it compares with the alternatives.
Introduced by Law 190/2014, the regime forfettario is a simplified, flat-rate regime for individuals with a partita IVA (Italian VAT number) whose revenue stays within an annual ceiling. Instead of ordinary IRPEF, which rises to 43% plus regional and municipal surtaxes, you pay a single substitute tax of 15%, or 5% for the first five years if your activity is genuinely new.
It also strips away most of the administrative burden. For anyone researching Italy freelancer tax, this is almost always the starting point.
This is the most misunderstood feature, and it works differently from almost every other country's flat tax. Under the forfettario you do not deduct your actual business costs. Your taxable income is a fixed percentage of your revenue, the profitability coefficient (coefficiente di redditività), set by law according to your ATECO activity code. The rest of your revenue is treated, in effect, as a flat allowance for costs.
The practical consequence is important: the forfettario is at its best for low-cost activities (consulting, coaching, software, design), where your real expenses are far below the flat allowance. If you run a genuinely cost-heavy business, the ordinary regime can sometimes beat it, a comparison worth running before you choose. Choosing the ATECO code correctly is one of the first things we get right for you.
Take a freelance consultant invoicing €50,000 in a year, with a 78% coefficient and Gestione Separata contributions. The taxable share of revenue is €39,000; after deducting contributions of about €10,170, the substitute tax is charged on roughly €28,830. That gives about €1,440 of tax at 5%, or €4,320 at 15%. Under the ordinary regime, the same consultant would pay roughly €8,800 of IRPEF and surtaxes, and higher contributions, because they are calculated on the full profit rather than on the coefficient.
The forfettario works on a cash basis (principio di cassa): what counts is money actually received in the year, not invoices issued. An invoice raised in December but paid in January falls into the new year. That matters both for staying under the ceilings and for the year you move to Italy, when income received before and after your arrival may be treated very differently.
Here is where the headline rate can mislead. The flat tax covers your income tax, not your social security. Every self-employed person in Italy must pay contributions, and how much depends on your category.
Two points that save real money: contributions are deductible before the substitute tax is applied, and artisans and traders can elect a 35% reduction of their contributions, with a corresponding reduction in future pension. Building the true net figure means putting tax and contributions together, which is exactly what our computation does.
There are two conditions to get in, both tested on the previous year. The regime is open regardless of nationality: once you are resident in Italy and open a partita IVA, you use it on the same terms as an Italian.
Even within the ceilings, several conditions block or end the regime. These are the ones that most often surprise new arrivals.
A narrow exception for mixed contracts (Law 203/2024) allows regulated professionals on a 40 to 50% part-time contract with large employers to combine it with the forfettario. On the rule for non-residents, the European Commission has opened an infringement procedure against Italy, so that rule may change.
A frequent situation for our clients: you already freelance abroad and want to continue for the same clients after moving to Italy. The Revenue Agency has confirmed (Ruling No. 197/2022) that you can use the forfettario when you transfer your residence and continue a professional activity previously carried on abroad. But you cannot claim the 5% start-up rate, because continuing an existing activity is not a new activity: you get 15%. Planning the exit from your home-country system and the timing of the move is where a cross-border adviser earns their keep.
If you are American, the forfettario needs careful handling, because the United States taxes its citizens wherever they live. We plan this alongside your US preparer.
If you have recently moved to Italy for work, you may also qualify for the Inbound Workers Regime (impatriati). The two cannot be combined on the same income: you choose one. As a rough guide, below about €35,000 to €40,000 of income the forfettario usually wins, thanks to the low rate and simplicity. Above that, impatriati often pulls ahead, because it has a far higher ceiling and lets you deduct real costs and claim personal credits. The crossover depends on your coefficient, your costs and your contributions, so it should always be modelled, not assumed.
Because the forfettario replaces IRPEF with a substitute tax, you generally cannot use ordinary tax credits for medical expenses, mortgage interest, university fees or renovation works, unless you also have other income taxed under IRPEF to set them against. For someone with only forfettario income and significant deductible expenses, the ordinary regime can occasionally be the better net choice.
Setting up correctly from the outset avoids expensive corrections later. We handle the whole set-up and the annual return.
Avv. Marco Mesina, a member of the Milan Bar (Ordine degli Avvocati di Milano) and formerly of Deloitte and Withers, advises internationals setting up as self-employed in Italy: choosing the right regime and ATECO code, coordinating INPS and, for Americans, the US-Italy social security and tax position. The forfettario looks simple, but the wrong regime, code or an overlooked exclusion can cost far more than it saves.
Yes. Once you move your tax residence to Italy and open a partita IVA, your nationality is irrelevant: you use the regime on the same terms as an Italian, provided you meet the conditions.
Only for the first five years of a genuinely new activity. After that, or if you continue an activity you already ran abroad, the rate is 15%. Social security is separate and always payable.
The ceiling looks at your self-employment revenue. Other income matters for the exclusions, for example employment income above €35,000, which is why a personal check is worth doing before you rely on the regime.
They cannot be combined on the same income, but your best option can change over time as your income grows. The choice should be reviewed, not fixed once and forgotten.
Sometimes, but not always. Because of US self-employment tax and foreign tax credit mechanics, the low Italian rate can be less useful for Americans. It needs to be modelled against the alternatives with your US preparer.
Avv. Marco Mesina
Founder, Move to Dolce Vita · Avvocato, Milan Bar (Ordine degli Avvocati di Milano)
Marco is an Italian tax lawyer who advises individuals and families relocating to Italy on tax regimes, residency, citizenship, real estate and succession planning. Before founding Move to Dolce Vita he worked at Watson Farley & Williams, Withers and Deloitte in Milan.