Regime Forfettario for Foreigners in Italy: 2026 Guide
The regime forfettario is Italy's simplified flat-tax scheme for small entrepreneurs, freelancers, and self-employed professionals. It is attractive for foreigners because it replaces the ordinary income tax brackets with a single flat tax, reduces bookkeeping, and exempts the business from VAT.
This guide explains the 2026 rules and how they apply to foreign nationals who want to work as freelancers or small business owners in Italy.
What is the Regime Forfettario?
The regime forfettario is a special tax regime for small taxpayers. It replaces the progressive personal income tax (IRPEF) with a single flat tax on your imputed taxable income.
Key features for 2026:
- Revenue limit: €85,000 gross per year.
- Flat tax rate: 15% (5% for the first five years for eligible new businesses).
- VAT exemption: no VAT is charged on invoices.
- No withholding tax: clients do not withhold taxes on payments.
- Simplified accounts: no full accounting regime, but income and expenses must still be recorded and electronic invoices are required.
The regime is popular with freelancers, consultants, e-commerce sellers below the threshold, and small service providers.
Who Can Use the Regime Forfettario?
Basic Eligibility
To qualify in 2026 you must generally:
- Have total annual revenues and fees not exceeding €85,000.
- Not be VAT-registered or have employees.
- Earn mainly self-employed or business income, not mainly employment income.
- Have expenses not exceeding a fixed cost percentage that depends on your ATECO code.
New Business Reduced Rate (5%)
You can apply the 5% rate for the first five years if:
- You have not carried out a self-employed or business activity, individually or in a partnership, in the previous three years.
- The new activity is not a mere continuation of a previous employment activity performed in the two years before opening the Partita IVA.
- The previous employment activity (if any) did not generate gross income above €30,000 in the previous year.
- You do not continue an activity previously carried out by another person.
After the first five years, or if the conditions are not met, the rate becomes 15%.
How Income is Calculated
In the regime forfettario, taxable income is not your actual profit. It is calculated by applying a profitability coefficient to your gross receipts. The coefficient depends on your ATECO code.
Common examples:
| Activity | ATECO sector example | Profitability coefficient |
|---|
| Professional consulting and technical services | 62.01, 70.22, 73.11 | 78% |
| E-commerce and trade | 47.91, 47.99 | 40% |
| IT and software services | 62.01, 62.09 | 67% |
| Food and beverage retail | 56.10, 10.71 | 40% |
| Translators and writers | 90.03, 58.11 | 78% |
| Real estate agents | 68.31 | 50% |
| Personal care services | 96.02 | 67% |
The remaining percentage is treated as a flat allowance for expenses.
Example Calculation
Suppose a foreign marketing consultant has gross revenues of €50,000 and a profitability coefficient of 78%:
- Taxable income: €50,000 × 78% = €39,000
- Substitute tax at 15%: €39,000 × 15% = €5,850
- INPS Gestione Separata at 26.07%: €39,000 × 26.07% = €10,167.30 (subject to minimum)
- Net after tax and contributions: €50,000 − €5,850 − €10,167.30 = €33,982.70
If the business qualifies for the 5% rate, the tax falls to €1,950 and the net rises to €37,882.70.
INPS Contributions for 2026
Self-employed professionals without a separate pension fund must pay INPS Gestione Separata contributions. For 2026 the rate is 26.07% of taxable income, with a minimum annual contribution of €4,903.25.
The contribution is partly deductible for income tax purposes. In 2026, the portion related to the IVS (pension) component is deductible, while the remaining portion (assistance and maternity) is not.
VAT and Invoicing
Under the regime forfettario you are exempt from VAT. You do not charge VAT to your clients and you cannot deduct VAT on your purchases.
However, you must still issue electronic invoices through the Sistema di Interscambio (SDI) when you invoice Italian clients. Invoices to foreign clients can usually be issued in paper or electronic form according to the rules of the client's country.
The €85,000 Limit: What Happens if You Exceed It?
The regime has a hard threshold of €85,000 of gross annual revenue. If you exceed this amount, you exit the regime from the following year and move to the ordinary tax regime. You will then charge VAT, keep full accounting, and pay ordinary IRPEF rates.
For this reason, if you expect to earn close to or above €85,000, it may be worth considering an SRL from the start.
Advantages and Disadvantages
Advantages
- Low flat tax rate (5% or 15%).
- No VAT compliance.
- Simplified accounting.
- Easy to open and close.
- Attractive for digital nomads, consultants, and small online businesses.
Disadvantages
- No VAT deduction on purchases.
- No flat-rate expense deduction beyond the fixed coefficient.
- Cannot have employees.
- Revenue limit of €85,000.
- INPS contributions can be high relative to income.
- Not suitable for businesses that need significant investment or inventory.
For Foreign Nationals: Practical Steps
- Check your right to work in Italy. EU/EEA citizens can work as self-employed. Non-EU citizens generally need a residence permit that permits lavoro autonomo.
- Obtain an Italian tax code (codice fiscale).
- Open a Partita IVA with the Agenzia delle Entrate.
- Choose the regime forfettario when opening the Partita IVA.
- Select the correct ATECO code with your commercialista.
- Open a bank account for the business.
- Set up electronic invoicing (fatturazione elettronica).
- File tax and INPS payments on time.
Related Regimes to Consider
If the regime forfettario does not fit your situation, consider:
- Ordinary regime: full VAT deduction, IRPEF progressive rates, required for higher revenues or businesses with employees.
- SRL: limited liability, IRES 24%, suitable for growing businesses.
- Regime impatriati: reduced income tax for workers who relocate to Italy, not the same as the regime forfettario.
Conclusion
The regime forfettario is a practical and low-tax option for foreign freelancers and small business owners in Italy, provided the €85,000 revenue limit fits your plans. The key is to choose the right ATECO code, understand the INPS cost, and keep electronic invoicing compliant. For a more structured business or higher revenues, an SRL or ordinary regime may be the better long-term choice.
Sources and Review Status
This article was last reviewed on 17 July 2026. It is based on the Italian Budget Law 2026 provisions, INPS Circular no. 8/2026, Agenzia delle Entrate guidance on the regime forfettario, and current rules on electronic invoicing. Tax rules change frequently; verify the current thresholds and rates with your commercialista before acting.
Official References
Giovanni Emmi|July 17, 2026
