The forfettario is Italy's flat-rate tax regime for small sole traders and professionals whose annual turnover does not exceed EUR 85,000. Instead of ordinary progressive IRPEF, it applies a single substitute tax and replaces regional and municipal surcharges. Taxable income is not based on real costs but on a fixed profitability coefficient tied to your ATECO business code.
The substitute tax rate is 15%, reduced to just 5% for the first five years of a genuinely new activity. Because expenses are ignored, the coefficient determines the taxable share of your revenue.
Example: a consultant (ATECO coefficient 78%) invoicing EUR 50,000 has taxable income of EUR 39,000. In the startup phase the tax is 5% = EUR 1,950; at the ordinary rate it would be 15% = EUR 5,850. Separately, INPS social contributions apply on the same taxable base.
- Turnover cap: EUR 85,000
- Rates: 5% (years 1-5) then 15%
- No VAT charged, no withholding tax
Compare outcomes with the Italian flat-rate calculator or read about the Portuguese simplified regime.