Contents
- What is forfettario and who is it for
- 5% and 15% rates — what’s the difference
- Profitability coefficient — the real tax burden
- Calculation with real numbers
- Who can use forfettario
- How to open a P.IVA under forfettario and avoid mistakes
- INPS contributions — the second part of payments
- Invoices and billing
- Limits and pitfalls
- The pension trap of forfettario
- Alternative: the Impatriati regime
- Real mistakes from the community
- Choosing an accountant
- Conclusions
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 Lavoro Autonomo residence permit this is the main financial advantage over Digital Nomad status. The difference in taxes is multiple times.
"Forfettario is connected to Partita IVA — you are not an employee but an independent contractor. A salaried employee does not switch to forfettario by choice — it’s a different nature of income."
5% and 15% rates — what’s the difference
How to get the 5% rate instead of 15% — and can it be fixed if the accountant made a mistake?
To get 5%, you must meet the condition “nuova attivita” — new activity. This means: you have not carried out a similar activity as an employee or as a sole proprietor in the previous 3 years.
CRITICAL ERROR — cannot be fixed
If the accountant did not mark "nuova attivita" when opening your P.IVA and indicated a 15% rate instead of 5% — changing this retroactively is IMPOSSIBLE. Even in subsequent years it will remain 15%. The rate is visible only in the already submitted declaration (LM module). Monitor this personally — request the submitted module from your accountant.
"I discovered: an external commercialista opened the Partita IVA under the forfettario regime, but with a 15% rate, not the preferential 5%. 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 is 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% at a turnover of 50,000 EUR and a coefficient of 78% is ~3,900 EUR/year — i.e. ~15,600 EUR over the 5 preferential years.
Profitability coefficient — the real tax burden
Why is the real tax under forfettario not 5% of turnover but less? What is coefficiente di redditività?
Many think forfettario is simply “5% of everything you earned.” In reality the tax is calculated more complexly — and to your advantage.
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% |
| Food service | 40% | 60% |
| Short-term rental B&B | 40% | 60% |
| Construction | 86% | 14% |
| Most services | 67% | 33% |
The lower the coefficient — the smaller the tax base and the less you pay. For IT specialists a 78% coefficient is not the most favorable, but still much better than the standard regime.
"Forfettario has a profitability coefficient that depends on the ATECO code. Your turnover is multiplied by this coefficient, and the resulting amount is your income. 22% or 33% automatically become your expenses — you don’t need to prove them."
Choice of ATECO code — for the lifetime of the P.IVA
The ATECO code determines not only the type of activity but also the profitability coefficient, and therefore the real tax amount. You can change the code, but it’s not easy and attracts tax authority attention. Choose carefully from the start.
Calculation with real numbers
How much do you actually keep with turnovers of 30k, 50k and 85k euros?
Calculation for an IT specialist (coefficient 78%, tax 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 in hand | 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 standard IRPEF regime with a turnover of 50,000 EUR 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 do the exact calculation.
Who can use forfettario
-
✓An individual with a Partita IVA
Legal entities (SRL, etc.) cannot use forfettario
-
✓Turnover under 85,000 EUR per year
All turnover counts, including foreign. In the first year the limit is prorated
-
✓No more than 2 employees
Or total payroll up to 20,000 EUR
-
✓For the 5% rate: "nuova attivita"
Have not carried out a similar 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 is open. If you opened it in November — your limit for 2 months is about 14,000 EUR, not 85,000. At the same time you need to show minimum income to renew your residence permit. Do not move in November–December if you plan to use forfettario.
How to open a P.IVA under forfettario and avoid mistakes
What documents are needed, when you can open it — and what opening mistakes are irreversible?
Obtain a Codice Fiscale
You can obtain it before the permesso — with a D visa and a request at the Agenzia delle Entrate. Fill in Modello AA4/8, refer to art. 6 DPR 605/1973.
Obtain residence (residenza)
For a Lavoro Autonomo (LA) permit, residence is legally granted only after getting the permesso. Formally you cannot open forfettario without residence. Some small municipalities allow it earlier — but that’s luck, not the rule.
Find a commercialista
The accountant will file the Communicazione Unica — a single form that simultaneously creates records at the Agenzia delle Entrate, INPS and Camera di Commercio (if needed).
Choose the ATECO code
Determines the type of activity, the profitability coefficient and the amount of contributions. For IT typically 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 declaration. Request a copy of the submitted document.
Deadline: December 31
If you arrived in Italy and did not open a P.IVA before the end of the year — you lose the ability to show Italian income for that tax year. This is critical for renewing a residence permit.
A current account is not required for forfettario
Clients can pay to a personal account or in cash. Minimal bureaucracy at the start. But to renew a residence permit you need to show income — start in advance.
INPS contributions — the second part of payments
How much are INPS pension contributions in reality — and can they be reduced?
In addition to the 5–15% tax, freelancers under forfettario must pay contributions to INPS (the pension/social fund). This is the main part of your payments.
Gestione Separata INPS
Rate: ~26% of the taxable income (the same base used for tax). Paid in advance and at year-end. Gives access to the national health service (SSN) and pension.
Payment deadlines
| Payment | Deadline | Form |
|---|---|---|
| First advance IRPEF + INPS | June 30 | F24 |
| Second advance IRPEF + INPS | November 30 | F24 |
| Final settlement | With the declaration | F24 |
"You can pay the F24 in the banking app. I used to pay in cash at the bank branch earlier."
Discount on INPS 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 artigiano). In 2025 a new law was introduced: businesses opened in 2025 pay 2,250 EUR to the pension fund instead of 4,500 EUR in the first year.
Invoices and billing
Since 2024 electronic invoicing (fattura elettronica) is 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 authority personal area
- VAT is not charged to clients
"When you have an accountant, you send them the invoices, they send you the declaration for approval and then file it with the tax office. They also give the form for tax payment. The declaration form is a pile of pages — I wouldn’t risk filling it myself, mistakes can cost more than the accountant’s fee."
Limits and pitfalls
In which situations is forfettario disadvantageous or unavailable?
- You cannot deduct actual expenses — tax is calculated on an imputed base, not on 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. Disadvantageous for B2B with Italian companies
- Turnover limit 85,000 EUR — if exceeded automatic switch to the ordinary regime from the next year
- Worldwide income is included — the limit considers all turnover, including foreign
- You cannot employ more than 2 employees
- Residence requires permesso — and without residence you formally cannot open forfettario (for LA)
"Residence for newcomers with lavoro autonomo is legally granted only after receiving the permesso. Obtaining it can drag on for six months–a year. An incorrect but popular path: open forfettario despite lacking residenza and hope it passes. The tax authority may audit in 2–3–5–7 years."
The pension trap of forfettario
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 work your entire career in Italy under forfettario, when you retire you will receive payments for only 7 months of the year. INPS will say: "you didn’t earn for the rest." Some specialists recommend switching tax status in advance — in some recalculations it turns out beneficial.
"If your Italy career is under forfettario, when you retire you will receive money for only 7 months per year. That’s why we changed our tax statuses long ago. In recalculation it turned out beneficial."
This does not mean forfettario is a bad regime. But plan decades ahead: if you intend to live in Italy until retirement, it’s worth switching to the ordinary regime at some point to accrue pension rights.
Alternative: the Impatriati regime
What is the Impatriati regime and when is it more advantageous than forfettario?
Regime Impatriati is a special tax regime for those moving to Italy. The essence: only 50% of income is taxed for 5 years. It can be extended another 5 years if you have a child or buy property.
High income — for turnover above 85,000 EUR/year
Employment — for those who cannot open a P.IVA
Higher education or professional experience in the field
Full pension accrual — contributions are based on the full salary
Turnover under 85,000 EUR — the 5% rate is lower than any IRPEF
Freelance/entrepreneurship — P.IVA
Minimal bureaucracy — simplified reporting
No need for deductions — low expenses
"The Impatriati regime taxes 50% of income for 5 years. You can extend another 5 years if you have a child or buy a home. Usually a higher degree 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 salary. But income from investments, crypto, rental properties — is taxed at the standard rate on the full amount.
Real mistakes from the community
The accountant did not mark "nuova attivita". Cannot be fixed retroactively. Loss: ~3,900 EUR/year at 50,000 EUR turnover.
Formally residence is mandatory. The tax authority may send additional assessments in 2–7 years. Three scenarios: wait for the permesso, open under the ordinary regime, or take the risk.
Lost an entire tax year to show Italian income. Critical for residence permit renewal.
Forgot about INPS (~26%). The real burden is about 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.
Choosing an accountant
How much does an accountant cost, which online services are suitable — and how not to end up with a dilettante?
| Option | Cost | Pros | Cons |
|---|---|---|---|
| Fiscozen | 499 EUR/year | Convenient interface, automation | Only electronic documents, raised prices |
| QuickFisco | 299 EUR/year + IVA | Cheaper, has English-speaking support | Only forfettario |
| Local accountant | 700–1,500 EUR/year | Personal contact, originals | More expensive, no automation |
"Be extremely careful when choosing a commercialista. Unfortunately there are many dilettantes in this market. The cost of a mistake is not a fine but a real risk of losing your residence permit."
"The accountant will handle 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 input data differ."
Verify your accountant’s work
Request the submitted LM module from the declaration — it shows the rate (5% or 15%). Ask for free initial consultations at 2–3 online accounting services before choosing. Finding a Russian-speaking accountant is difficult, but there are English-speaking ones.
Conclusions
5% instead of 23–43% IRPEF. At a turnover of 50,000 EUR 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 significantly less than the ordinary regime (35–45%).
An incorrect rate (15% instead of 5%) cannot be fixed. A wrong ATECO code affects the profitability coefficient. Check the LM module personally.
If your entire career is under forfettario — pension only 7 months per year. Plan to switch to the ordinary regime if you stay in Italy long-term.
You will lose an entire tax year. And in the first year the 85,000 EUR limit is prorated — do not move in November–December.