If you're planning to work as a freelancer in Italy, the Regime Forfettario — often called the flat rate tax scheme — is likely the first option you’ll come across.
It’s popular for a reason. It offers lower tax rates, simplified accounting, and fewer administrative requirements. But it’s also often misunderstood, especially when it comes to how income is calculated, how much you actually pay, and what obligations you still have.
This guide walks you through everything you need to know in 2026 — including how to calculate your taxable income, how INPS contributions work, and what deadlines you need to keep in mind.
What Is the Regime Forfettario?
The Regime Forfettario is a simplified tax system designed for freelancers and small businesses in Italy.
Instead of taxing your actual profit, the system estimates your income using a profitability coefficient, and applies a flat tax rate:
- 5% for the first 5 years (if eligible)
- 15% thereafter
This is what makes it attractive — but also why understanding the calculation is essential.
Key Requirements in 2026
To qualify, you must meet several conditions:
- Annual revenue must not exceed €85,000
- If revenue exceeds €100,000, you exit immediately
- Employee/contractor costs must stay below €20,000/year
- Employment income must not exceed €35,000
You also need to meet conditions to access the 5% rate, including starting a new activity and not continuing previous employment.
Step 1: Choosing Your ATECO Code
When you register as self-employed in Italy, you must select an ATECO code. This defines the type of activity you carry out and determines your profitability coefficient.
For example:
- Consultants and many freelancers → ~78%
- Traders → lower coefficients
- Other professions → vary depending on sector
This coefficient directly impacts how much tax you pay — so choosing the correct ATECO code is critical.
The complete list of ATECO codes is available on the website of the Revenue Agency and you are assigned one, when you open the VAT number: you can request your ATECO code to the accountant or to the Chamber of Commerce.
You can find all the profitability coefficients in the table published in the Gazzetta Ufficiale (Official Journal).
Step 2: How to Calculate Your Taxable Income
This is where the Regime Forfettario works differently from most tax systems.
You don’t deduct actual expenses. Instead:
- Take your total revenue
- Apply your ATECO profitability coefficient
- The result is your taxable income
Example:
- Revenue: €50,000
- Coefficient: 78%
- Taxable income: €39,000
Now apply the tax rate:
- 5% → €1,950
- 15% → €5,850
👉 This is why the regime works best for freelancers with low expenses.
Step 3: Calculating INPS Contributions
Taxes are only part of the picture. As a freelancer in Italy, you must also pay INPS social security contributions.
These are calculated on your taxable income (after applying the coefficient).
Example:
- Taxable income: €39,000
- INPS rate (approx.): ~26%
INPS contributions:
- €39,000 × 26% = €10,140
These contributions are partially deductible, which slightly reduces your taxable base.
👉 The key takeaway: your real cost is tax + INPS combined, not just the flat tax rate.
Step 4: Paying Taxes with F24
In Italy, freelancers pay taxes using the F24 form, which is the standard payment system for:
- Income tax
- INPS contributions
- Other obligations
Payments are typically made online via your bank or through your accountant.
Important Deadlines to Know
Freelancers in the Regime Forfettario usually follow this payment schedule:
- June 30 → balance payment (previous year) + first advance payment
- November 30 → second advance payment
These advance payments are based on your previous year’s income, which can catch new freelancers off guard.
👉 Planning for cash flow is essential.
VAT and Invoicing in the Flat Rate Scheme
One of the main advantages of the regime is that you don’t charge VAT.
This means simpler invoicing and no VAT returns. However, you still need to; issue compliant invoices, include correct legal wording and follow rules for international clients.
👉 See: how to invoice foreign clients in Italy.
Electronic Invoicing (Mandatory in 2026)
As of 2026, most freelancers must use electronic invoicing (fatturazione elettronica). Invoices must now be created in XML format and sent via the SDI system.
This applies even if you are under the flat tax regime.
What About Expenses in the Forfettario Regime?
Unlike standard regimes, you cannot deduct real business expenses. Instead expenses are already “built into” the coefficient. This simplifies accounting — but can be limiting.
If your business has high costs, this is one of the main reasons the regime may not be ideal.
When the Regime Forfettario Works Best
This regime is particularly effective if:
- your expenses are low
- you work independently
- your revenue is below €85,000
- you want minimal administration
When It Might Not Be the Right Choice
It may not be ideal if:
- you have significant business costs
- you plan to scale quickly
- you need more flexibility
👉 In those cases, a standard regime may be more suitable: Forfettario vs Semplificato explained.
Set Up Your Flat Tax Business the Right Way
The Regime Forfettario can be extremely efficient — but only if it’s set up and managed correctly.
From choosing the right ATECO code to handling invoices, taxes, and deadlines, there are several moving parts to get right.
With Xolo, you can:
- Register your freelance activity in Italy
- Get support with taxes and compliance
- Focus on your business instead of admin
👉 Start freelancing in Italy with Xolo
Final Thoughts
The flat rate scheme remains one of the most attractive options for freelancers in Italy — but it’s not as simple as “pay 5% tax.”
Understanding how taxable income is calculated, how INPS contributions work, and what your obligations are is essential to making the most of it.
If you approach it with the right setup and expectations, it can be a powerful way to run a freelance business in Italy.
FAQ
How is taxable income calculated in the flat tax scheme?
By applying a profitability coefficient to your revenue, not by deducting expenses.
Do I need to pay social security in Italy?
Yes. INPS contributions are mandatory and calculated on your taxable income.
What is the F24 form?
It’s the system used to pay taxes and contributions in Italy.
Do freelancers pay VAT under Forfettario?
No. VAT is not applied.