Forfetario Regime: Set up your business in Italy just paying 5% of taxes

Taxation of freelancer  italy flat-rate scheme (forfetario regime)

Many expats who arrive in Italy, carry out a freelancer activity.

I am often asked what opportunities there are from a fiscal point of view.

One of the most widely adopted schemes by freelancers is the flat-rate scheme (forfetario regime), which consists of the payment of a fixed tax, on a flat-rate basis.

Taxation varies

• In the first 5 years a 5% tax is applied
• Subsequently the taxation is 15%

Taxable amount Forfetario regime

The taxable amount is determined on a flat-rate basis at rates defined by law.

For many freelancers, the tax base is calculated by applying a coefficient of 78% on gross revenues.

Social security contribution flat-rate scheme (forfetario regime)

Freelancers who choose the flat-rate scheme in Italy are required to register for social security contributions. If these are protected activities, for which a license is required (lawyers, tax advisors notaries, engineers, etc …) there is  private foresight. Otherwise, for unprotected activities, they will have to register with the INPS separate management.

Social security contributions are deductible from income.

Example of calculation of taxation for a freelancer in Italy with a flat-rate scheme

Income 30.000€

Social security tax base (30,000*78%)= € 23,400

Social security: (23.400*25,72%)= 6.019€

Tax base: 17.381€

Taxes: 17,381€*5%= 869€

So on a gross income of 30,000 you will pay 6,019€ of social security is 869 € of personal taxes