Italy Guide 2026: all cluster articles
Permesso: first obtaining - Permesso renewal - Permanent residence and citizenship - Times at the Questura - Codice Fiscale (tax code) - Digital Nomad visa
Cost of living - Forfettario 5% - Regime Impatriati - INPS and pensions - ISEE and benefits - Driving licences - Driving and fines
This article is also available in English
Contents
- What is Forfettario and who is it for
- The 5% and 15% rates — what’s the difference
- Profitability coefficient — the real tax base
- Calculation with real numbers
- Who can apply Forfettario
- How to open a P.IVA under Forfettario and avoid mistakes
- INPS contributions — the second part of the payments
- Invoices and billing
- Limitations and pitfalls
- Forfettario pension trap
- Alternative: the Impatriati regime
- Real mistakes from the community
- Choosing an accountant (commercialista)
- Conclusions
In short: Forfettario is a simplified regime: 5% tax for the first 5 years, then 15%. Turnover limit: 85,000 EUR/year. No VAT (IVA). Plus INPS contributions ~26% of the taxable base (after the coefficient). Real tax burden on 50k EUR turnover: ~12,000 EUR (tax + INPS). Partita IVA (VAT number) and residence are required.
What is Forfettario and who is it for
This guide is about Forfettario. For other regimes — Impatriati.
Why do freelancers and entrepreneurs in Italy pay only 5% tax — and how to get into this regime?
Regime Forfettario is a simplified tax regime in Italy for the self-employed and sole proprietors. Instead of the standard progressive IRPEF scale (23–43%), you pay a fixed rate of 5% or 15% — and no VAT (IVA).
For immigrants with a permesso di soggiorno for Lavoro Autonomo (self-employment) this is the main financial advantage over Digital Nomad status. The difference in taxes is huge.
“Forfettario is linked to the Partita IVA (VAT number) — you are not an employee but an independent contractor. A salaried employee cannot switch to Forfettario by choice — it’s a different nature of income.”
The 5% and 15% rates — what’s the difference
How to obtain the 5% rate instead of 15% — and can it be corrected if the accountant made a mistake?
To get 5%, you must meet the condition of “nuova attivita” — a new activity. This means you have not carried out the same activity as an employee or as a sole proprietor in the previous 3 years.
CRITICAL MISTAKE — irreversible
If the accountant did not indicate “nuova attivita” when opening the Partita IVA and entered the 15% rate instead of 5% — changing this retroactively is IMPOSSIBLE. It will remain 15% even in subsequent years. The rate is visible only in the already-submitted tax return (module LM). Monitor this personally — request the submitted module from your accountant.
“I discovered: an external commercialista (accountant) opened the Partita IVA under Forfettario but with the 15% rate instead of the 5% reduced rate. We haven’t filed the tax return with income yet. Can anything be done?”
“The Partita IVA was opened by the previous commercialista with a 15% rate, and unfortunately we cannot change the past. It’s impossible to change this retroactively and activate 5%.”
Get a second opinion
A consultation, even paid, can save a lot of money over 4 years. The difference between 5% and 15% on a 50,000 EUR turnover with a 78% coefficient is ~3,900 EUR/year — about ~15,600 EUR over the 5 preferential years.
Profitability coefficient — the real tax base
Why is the real tax for Forfettario not 5% of turnover, and what is coefficiente di redditività?
Many think Forfettario is simply “5% of everything you earned”. Actually the tax is calculated more favorably for you.
Formula: Turnover x Profitability coefficient x Tax rate = Tax
The profitability coefficient (coefficiente di redditività) depends on the ATECO code — your type of activity. The remainder is automatically considered expenses that do not need to be documented.
| Activity | Coefficient | “Automatic expenses” |
|---|---|---|
| IT, programming, consulting | 78% | 22% considered expenses |
| Design, architecture | 78% | 22% |
| Trade | 40% | 60% |
| Catering | 40% | 60% |
| Short-term B&B rentals | 40% | 60% |
| Construction | 86% | 14% |
| Most services | 67% | 33% |
The lower the coefficient, the smaller the taxable base and the less you pay. For IT professionals the 78% coefficient isn’t the most favorable, but it’s still much better than the ordinary regime.
“For Forfettario there is a profitability coefficient that depends on the ATECO code. Your turnover is multiplied by this coefficient, and the resulting amount is your taxable income. 22% or 33% automatically become your expenses — you don’t need to prove them.”
Choice of ATECO code — for the entire life of the P.IVA
The ATECO code determines not only the type of activity but also the profitability coefficient, and therefore the real amount of tax. You can change the code, but it’s not simple and attracts tax authorities’ attention. Choose carefully from the start.
Calculation with real numbers
How much do you actually take home with turnovers of 30k, 50k and 85k euros?
Calculation for an IT professional (coefficient 78%, rate 5%, Gestione Separata INPS ~26%):
| Parameter | Turnover 30,000 | Turnover 50,000 | Turnover 85,000 |
|---|---|---|---|
| Turnover | 30,000 EUR | 50,000 EUR | 85,000 EUR |
| Taxable base (x 78%) | 23,400 EUR | 39,000 EUR | 66,300 EUR |
| Forfettario tax (5%) | 1,170 EUR | 1,950 EUR | 3,315 EUR |
| INPS (~26% of the base) | 6,084 EUR | 10,140 EUR | 17,238 EUR |
| Commercialista | ~500 EUR | ~500 EUR | ~500 EUR |
| Total payments | 7,754 EUR | 12,590 EUR | 21,053 EUR |
| Net take-home | 22,246 EUR | 37,410 EUR | 63,947 EUR |
| Effective rate (all payments) | ~26% | ~25% | ~25% |
The effective tax burden including INPS is about 25–26%. The main part is INPS (pension contributions), not the tax itself. For comparison: under the ordinary IRPEF regime with a 50,000 EUR turnover you would pay ~35–40%.
Important: INPS is deductible from the tax base
INPS contributions can be deducted from taxable income in the following year. Actual figures will be slightly lower than shown — your commercialista will provide an exact calculation.
Who can apply Forfettario
-
✓An individual with a Partita IVA (VAT number)
Legal entities (SRL, etc.) cannot apply Forfettario
-
✓Turnover under 85,000 EUR per year
All turnover is counted, including foreign. In the first year the limit is prorated.
-
✓No more than 2 employees
Or a total payroll up to 20,000 EUR
-
✓For the 5% rate: “nuova attivita”
You must not have carried out the same activity in the previous 3 years
First-year trap: the limit is prorated
In the first year the 85,000 EUR limit is applied proportionally to the period the P.IVA was open. If you opened it in November — your limit for 2 months is roughly 14,000 EUR, not 85,000. At the same time you need to show minimum income for residence permit renewal. Don’t move in November–December if you plan Forfettario.
How to open a P.IVA under Forfettario and avoid mistakes
What documents are needed, when you can open it — and which mistakes at opening cannot be fixed?
Obtain a Codice Fiscale (tax code)
You can obtain it before the permesso — with a D visa and applying at the Agenzia delle Entrate. Fill in Modello AA4/8, refer to art. 6 DPR 605/1973.
Obtain residence (residenza)
For Lavoro Autonomo by law residence is due only after obtaining the permesso. Formally you cannot open Forfettario without residence. Some small municipalities do it earlier — but that’s luck, not the rule.
Find a commercialista (accountant)
The accountant will file the Comunicazione Unica — a single form that simultaneously creates records at the Agenzia delle Entrate, INPS and the Chamber of Commerce (if needed).
Choose an ATECO code
It determines the type of activity, the profitability coefficient and the amount of contributions. For IT it’s usually 62.01 or 62.02. Discuss with your accountant.
Check that “nuova attivita” and the 5% rate are indicated
Ask the accountant to show the completed form BEFORE submission. The rate is visible in the LM module of the tax return. Request a copy of the submitted document.
Deadline: December 31
If you arrived in Italy and did not open a P.IVA by the end of the year — you lose the opportunity to show Italian income for that tax year. This is critical for residence permit renewal.
A bank account is not mandatory for Forfettario
Clients can pay to a personal account or in cash. Minimal bureaucracy at the start. But to renew your residence permit you need to show income — start early.
INPS contributions — the second part of the payments
How much are INPS pension contributions in reality — and can they be reduced?
Besides the 5–15% tax, freelancers under Forfettario must pay contributions to INPS (the pension/social security fund). This is the main part of your payments.
Gestione Separata INPS
Rate: ~26% of the taxable base (the same base used for the tax). Paid in advance and reconciled at year-end. Gives access to public healthcare (SSN) and pension rights.
Payment deadlines
| Payment | Deadline | Form |
|---|---|---|
| First advance IRPEF + INPS | June 30 | F24 |
| Second advance IRPEF + INPS | November 30 | F24 |
| Final settlement | Via the tax return | F24 |
“You can pay the F24 form via the banking app. I used to pay in cash at the bank branch.”
INPS reductions in the first years
For businesses opened in certain years you can request a reduction: 50% for the first 2 years or 35% for the first 5 years (for artigiani). In 2025 a new law: a business opened in 2025 pays 2,250 EUR to the pension fund instead of 4,500 EUR in the first year.
Invoices and billing
Since 2024 electronic invoices (fattura elettronica) are mandatory for everyone, including Forfettario.
- Sent through the SDI system (Servizio di Interscambio)
- On invoices write: “Regime forfettario: operazione fuori campo IVA”
- Services for sending: Fiscozen, accountants’ built-in tools, the tax agency’s personal portal
- VAT is not charged to clients
“When you have an accountant, you send them your invoices, they send you the tax return for approval and then file it for you. They also give you the payment form for the tax. The tax return form is many pages — I wouldn’t risk filling it in myself, mistakes can cost more than the accountant’s fee.”
Limitations and pitfalls
In which situations is Forfettario disadvantageous or unavailable?
- You cannot deduct actual expenses — tax is calculated on an imputed base, not real profit. If you have high costs (equipment, office rent, travel) Forfettario may be disadvantageous
- No VAT — you do not charge VAT to clients and cannot reclaim VAT on purchases. Unfavorable for B2B with Italian companies
- Turnover limit 85,000 EUR — exceeding it triggers automatic transition to the ordinary regime from the next year
- Worldwide income is included — the limit counts all turnover, including foreign
- Cannot hire more than 2 employees
- Residence required for the residence permit — and formally you cannot open Forfettario without residence (for Lavoro Autonomo)
“Residence for newcomers with Lavoro Autonomo is due by law only after obtaining the permesso. Obtaining it can take six months to a year. An incorrect but popular path: open Forfettario despite no residence and hope it works out. The tax authority may investigate in 2–3–5–7 years.”
Forfettario pension trap
Is it true that under Forfettario the pension will be minimal — and what to do about it?
7 months of pension per year
If you spend your entire career in Italy working under Forfettario, when you retire you will receive payments for only 7 months of the year. INPS will say: “you didn’t earn enough for the rest.” Some specialists recommend switching regime in advance — recalculation can sometimes be more favorable.
“If your career in Italy is under Forfettario, when you retire you will receive payments for only 7 months of the year. That’s why we switched our tax statuses long ago. The recalculation turned out to be advantageous.”
This does not mean Forfettario is a bad regime. But plan for decades ahead: if you intend to live in Italy until retirement, at some point it may be worth switching to the ordinary regime to build pension entitlements.
Alternative: the Impatriati regime
What is the Impatriati regime and when is it better than Forfettario?
Regime Impatriati is a special tax regime for those relocating to Italy. The gist: only 50% of income is taxed for 5 years. It can be extended for another 5 years if you have a child or buy a home.
High income — turnover above 85,000 EUR/year
Employment — for those who cannot open a P.IVA
Higher education or relevant professional experience
Full pension — contributions calculated on the full salary
Turnover under 85,000 EUR — the 5% rate is lower than any IRPEF bracket
Freelance/entrepreneurship — P.IVA
Minimal bureaucracy — simplified reporting
No need for deductions — low expenses
“Impatriati means 50% of income is taxed for 5 years. You can extend another 5 years if you have a child or buy a home. Usually higher education or certain professional experience is enough to qualify.”
Impatriati does not apply to capital income
If you have employment under Impatriati — income tax is paid only on 50% of the salary. But income from investments, crypto, rental property — is taxed at the standard rate on the full amount.
Real mistakes from the community
The accountant did not mark “nuova attivita”. Irreversible. Loss: ~3,900 EUR/year on 50,000 EUR turnover.
Formally residence is required. The tax authority may send assessments in 2–7 years. Three scenarios: wait for the permesso, open under the ordinary regime, or take the risk.
Lost a full tax year to show Italian income. Critical for residence permit renewal.
Forgot about INPS (~26%). Real burden ~25–26% of turnover, not 5%.
Opened P.IVA in November, earned 20,000 EUR in 2 months — exceeded the prorated limit and lost Forfettario status.
Official source: Agenzia delle Entrate
Choosing an accountant (commercialista)
How much does an accountant cost, which online services are suitable — and how to avoid an amateur?
| Option | Cost | Pros | Cons |
|---|---|---|---|
| Fiscozen | 499 EUR/year | User-friendly interface, automation | Only electronic documents, prices increased |
| QuickFisco | 299 EUR/year + IVA | Cheaper, has English speakers | Only Forfettario |
| Local accountant | 700–1,500 EUR/year | Face-to-face contact, originals | More expensive, less automation |
“Be extremely careful when choosing a commercialista. Unfortunately the market has many amateurs. The cost of a mistake is not just a fine, but a real risk of losing your residence permit.”
“An accountant will do what you bring them. And you must bring the correct model: who you are, how you receive income, where you actually live, what documents your employer has. The community complains about different answers not because everyone is bad, but because people’s starting data differ.”
Verify your accountant’s work
Request the submitted LM module from the tax return — it shows the rate (5% or 15%). Ask for free initial consultations with 2–3 online accountants before choosing. Finding a Russian-speaking accountant is hard, but there are English-speaking ones.
Conclusions
5% instead of 23–43% IRPEF. With a 50,000 EUR turnover the tax savings are 7,000–10,000 EUR/year compared to the ordinary regime.
To the 5% tax add INPS contributions ~26%. Total ~25–26% of turnover. But this is still much less than the ordinary regime (35–45%).
An incorrect rate (15% instead of 5%) cannot be corrected. The wrong ATECO code affects the profitability coefficient. Check the LM module personally.
If your whole career is on Forfettario — pension payments only 7 months a year. Plan to switch to the ordinary regime if you stay long-term in Italy.
You will lose a whole tax year. And in the first year the 85,000 EUR limit is prorated — don’t move in November–December.
Information in this article is based on community experience and open sources. This is not legal advice. For your specific situation consult a licensed professional.