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 prior-year total revenues and fees not exceeding €85,000.
- Have prior-year gross expenditure for employees, collaborators and the other workers listed by law not exceeding €20,000.
- Avoid the statutory exclusions, including incompatible VAT regimes, certain holdings in partnerships or controlled SRLs, predominant invoicing to a current or recent employer, and—unless the employment relationship ended—more than €35,000 of employment and similar income in 2025. Law 199/2025 extended the €35,000 limit to tax year 2026.
- If non-resident, fall within the narrow exception for residents of an EU/EEA state with adequate information exchange who produce at least 75% of total income in Italy.
New Business Reduced Rate (5%)
You can apply the 5% rate in the tax period in which a genuinely new activity begins and the following four tax periods if:
- You did not carry on a business, artistic or professional activity—also through an association or family business—in the previous three years.
- The activity is not a mere continuation of prior employment or self-employment, except for a compulsory professional traineeship.
- If you continue an activity previously carried on by another person, that activity's prior-year revenues or fees did not exceed €85,000.
These startup conditions are separate from the rule excluding a forfettario activity carried on predominantly for a current employer, an employer from either of the two prior tax periods, or related parties. For a focused explanation of the startup relief, see our 5% tax guide for foreigners.
How Income is Calculated
In the regime forfettario, taxable income is not your actual profit. It is calculated by applying the profitability coefficient for the statutory activity group to receipts. Compulsory social-security contributions paid are then deductible when calculating the substitute-tax base.
Italy uses ATECO 2025 codes for fiscal and administrative filings in 2026. ISTAT's July 2026 documents update the ATECO 2025 correspondence tables; they do not introduce a separate “ATECO 2026”. Do not infer the coefficient from a broad label such as “consultant” or “IT”: confirm the current code and the statutory coefficient group.
| Illustrative activity group | Profitability coefficient |
|---|
| Many professional, scientific and technical activities | 78% |
| Other economic activities, including many software activities | 67% |
| Many retail, e-commerce, accommodation and food-service activities | 40% |
The remaining percentage is the statutory allowance for costs. Actual business expenses normally do not reduce forfettario income, while compulsory pension contributions are separately deductible.
Example Calculation
Suppose a foreign marketing consultant has receipts of €50,000, a confirmed profitability coefficient of 78%, and is a Gestione Separata professional with no other compulsory pension scheme:
- Deemed income: €50,000 × 78% = €39,000
- Illustrative 2026 INPS: €39,000 × 26.07% = €10,167.30
- Substitute-tax base after that deductible contribution: €39,000 − €10,167.30 = €28,832.70
- Substitute tax at 15%: €28,832.70 × 15% = €4,324.91
- Cash after the illustrated contribution and tax: €50,000 − €10,167.30 − €4,324.91 = €35,507.79
If all 5% new-activity conditions are met, the substitute tax would be €1,441.64 and the corresponding cash amount €38,391.06. This simplified same-year illustration ignores payment timing, advances, stamp duty and any other income or credits.
For a personalised estimate using your own receipts, coefficient and INPS position, try our freelance tax calculator.
INPS Contributions for 2026
Self-employed professionals without another compulsory pension fund or pension generally pay 26.07% in 2026: 25% IVS plus 1.07% for the additional protections identified by INPS Circular 8/2026. Professionals already insured elsewhere or receiving a direct pension generally face the separate 24% rate.
Gestione Separata has no fixed minimum contribution for these professionals. The €4,903.25 figure is the contribution corresponding to the €18,808 reference income needed to credit a full contribution year; lower income can produce a smaller payment and proportionally reduced credited months. Artisans and traders instead use different funds, with 2026 ordinary rates of 24% and 24.48% and annual minimum contributions of €4,521.36 and €4,611.64. Eligible forfettario entrepreneurs in those funds can request the separate 35% contribution reduction.
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.
Electronic invoices through SDI are generally required, including for transactions with foreign clients under the applicable cross-border reporting rules. The forfettario VAT exclusion does not remove every VAT identification or cross-border compliance obligation.
The €85,000 Limit: What Happens if You Exceed It?
If receipts exceed €85,000 but not €100,000, you leave the regime from the following year. If receipts exceed €100,000, the regime ends in the same year and VAT is due from the transaction that causes the threshold to be exceeded.
For this reason, plan before approaching either threshold; the consequences at €100,000 are not the same as those at €85,000.
Advantages and Disadvantages
Advantages
- No output VAT on ordinary domestic invoices.
- Simplified accounting rather than full ordinary-regime books.
- A 5% startup rate where every new-activity condition is met.
- 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.
- Employee and collaborator costs are permitted only within the €20,000 prior-year limit.
- Prior-year receipts above €85,000 prevent access for the following year, while current-year receipts above €100,000 trigger immediate exit.
- 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.
If the regime forfettario does not fit your situation, consider:
- Ordinary regime: ordinary VAT and accounting rules, with progressive IRPEF for individuals and deduction of eligible actual costs.
- SRL: limited liability and corporate taxation, suitable where risk, investment or growth justifies the added compliance.
- Regime impatriati: a separate income-tax-base reduction for qualifying workers who relocate to Italy; it is not 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 10 September 2026 against the legislation and INPS material linked below. Tax rules and an individual's ATECO classification can change; verify your facts before acting.
Official References
Giovanni Emmi|July 17, 2026
