The Italian Forfettario Regime
Italy's flagship simplified tax regime: 5% flat for the first 5 years, then 15%, on self-employed turnover up to €85,000. The combination of low rate, low compliance, and a real EU base makes Forfettario the headline draw of the Italian DNV — for the right profile.
Self-employed sole-proprietors with turnover under €85,000/year pay 5% flat for 5 years, then 15%. Above €85,000, the regime ends abruptly. Employees and Italian-company owners cannot use it. INPS social contributions (±26%) apply on local income on top.
- Year 1–5 effective rate
- 5%
- After year 5
- 15%
- Turnover cap (hard)
- €85,000
- Eligibility
- Self-employed sole-prop only
How Forfettario actually works
The regime forfettario is Italy's simplified-taxation framework for self-employed individuals (Partita IVA holders) with turnover under €85,000 in a calendar year. The mechanics are unusually clean:
- Years 1–5: 5% flat tax on the imponibile (profit, calculated as turnover × the coefficient for your sector — typically 67% or 78%).
- Year 6 onward: 15% flat on the same base.
- No IRPEF brackets: the standard progressive 23–43% schedule is replaced entirely.
- No VAT obligation: under the regime you don't charge VAT to clients (huge admin saving).
- No INPS contributions out of payroll: BUT — INPS contributions on freelance income (around 26%) still apply separately.
Worked example: €60,000 of consulting income
Sector coefficient 78% (most professional services) → imponibile = €46,800. Years 1–5: 5% × €46,800 = €2,340 income tax. INPS gestione separata: 26% of €46,800 = €12,168. Total Italian tax + social: €14,508 (about 24% effective). Compare to standard regime at progressive IRPEF: roughly €26,500 + social = €38,000+ on the same income. The savings are real.
The €85,000 cliff
Cross €85,000 of turnover and you exit the regime. From the following tax year you operate under standard progressive IRPEF and full VAT obligations. There is no taper, no buffer year. Many Forfettario users cap invoicing at €84,500 to preserve the regime year over year.
Forfettario and the Italian DNV
Italian DNV holders who freelance for non-Italian clients can register a Partita IVA and apply for Forfettario. The interaction is structurally clean: DNV gives you the right to reside, Forfettario gives you the favourable tax treatment, and the two run on independent clocks. The DNV is valid 12 months (renewable); Forfettario is valid as long as you stay under €85,000 turnover.
For Italian DNV holders employed by a foreign employer, Forfettario doesn't apply — your employment income is taxed under standard IRPEF brackets with no special regime. Some applicants restructure as freelancers contracting back to their prior employer; this is doable but requires careful structuring to avoid being deemed an Italian employee under substance-over-form tests.
Forfettario in the European picture
Italy sits inside a wider European picture. Here is how Forfettario compares to the other 12 European DNV tax regimes — flat rates, exemptions, and how long the special treatment lasts.
Foreign-income exemption
Foreign income exempt
Tax detailsNon-resident (under 183 days)
Foreign income exempt
Tax detailsIT-sector exemption
All applicants
Tax detailsNomad flat tax
All applicants
Tax details50% income tax exemption
17 years
Tax detailsIFICI (ex-NHR)
10 years
Tax details50% income tax exemption
7 years
Tax detailse-Residency company option
All applicants
Tax detailsBeckham Law
All applicants
Tax detailsImpatriati
All applicants
Tax detailsGo deeper on Italian DNV tax
Italy DNV tax page
Full Italy DNV tax mechanics: Forfettario, standard IRPEF, INPS, social security, and the filing rhythm
Italy DNV guide
Italy DNV pillar: income threshold, application path, dual-citizenship rules, family inclusion
Looking at Italy more broadly than just tax?
Forfettario is the headline. The full Italy DNV picture includes citizenship at 10 years, family inclusion, and the regional cost of living.