A special tax scheme (Regime Forfettario) offers a flat rate on gross income for taxpayers looking to get themselves registered for VAT and start a self-employed business or profession for the first time in 2019. The various schemes for small taxpayers (the Regime dei Minimi/Regime Forfettario) have seen a number of changes over the years 
and some of the old rules continue to apply to people who started out in earlier years.
But from FY 2016 onward there is only one regime open to new taxpayers – the Flat–Rate Scheme. This Scheme was updated in December 2018, with the main result that the threshold was increased to Euro 65,000. The 5% reduced rate for the first five years remains for start-ups. Please get in touch with us if you want to check if you qualify.
The Flat Rate Tax Scheme is optional, so taxpayers (who are not already registered under an older scheme) should indicate in advance when registering for VAT, and must confirm the option in their first annual tax return after registering, whether they wish to take the benefit of the scheme. If they do not then they will be subject to tax on their net profit at the usual scale rates.
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My disabled sister is resident in Italy & employs a full time carer.What are the current tax liabilities?
Her current tax liabilities will depend on her income and the extent of her disability. You can find a guide (in Italian but which can be translated with google into English of a sort) on benefits and tax breaks for the disabled here: https://www1.agenziaentrate.gov.it/web_app_entrate/agevolazioni_disabilita.html.
If you need any further advice use our client sign up form, ask the question and we will provide a quote for answering it.
Having worked as a teacher in Italy for numerous years with various occasional and indeterminato contracts, am I eligible to change to the flat rate scheme, despite continuing the same type of work? Thanks very much
Yes – there are a number of conditions – in particular you can’t be a shareholder in a company, and there are rules to counter people giving up employment and converting to self-employed. So if you meet the requirements then you can get set up under this regime.
You will need to consider carefully if you are entitled to the 5% reduced rate for the first five years or whether you will be subject to the standard 15% rate. This depends on what you have been doing in the past
Can I qualify for this tax regime if I provide freelance writing services to other companies in other EU states? I’m resident for tax purposes in Italy so will obviously be paying tax to Italy, but I will not have any Italian clients.
Hi Barry,
There is no bar, under the flat tax regime to your providing services to clients outside Italy. What is important is that you are resident in Italy and/or providing the services from a base in Italy. So as long the general rules apply then you can happily operate this regime. Not only will you be liable to the flat rate tax (5%/15% on the relevant percentage of gross income)you will also be liable to Italian social security (unless you are covered by a treaty (e.g with the U.S. and carry on paying social security abroad).
If you are billing in a currency other than Euro I generally recommend issuing a simple advice note – advising the client on what is due (or this can be done through any online platform that you are using) and then issue the Italian tax invoice in Euro (converted ideally at the Bank of Italy exchange rate on the day of receipt). Print a hard copy of that invoice and apply the 2 euro bollo stamp duty to your copy, inserting the bollo number on your pdf copy sent to the client.