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.
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. It was further updated at the end of 2022 with the result that the annual threshold is now Euro 85,000. 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.
Modello Redditi PF The tax return is called “PF” standing for Persone Fisiche (individuals). Modello in Italian means “Form”. The PF form is for use by individuals who are not able to present the simplified tax return (the modello 730) or who having filed a 730, need to report foreign income
General Rules An Italian resident taxpayer has the right to certain deductions and claim a tax deduction or tax credit for certain expenses and charges incurred in the relevant tax return. Some, but not all, of these deductions/credits may be claimed by non-residents with taxable
These are the personal income tax rates that apply after 1 January 2022. For applicable rates before that date please click this link FY 2022 Rates of Italian Income Tax (based on annual income) Bracket of Income (annual amounts) Rate Cumulative Tax to Top of Band