If you freelance in Italy as an individual with under €85,000 in revenue, you probably filed under the regime forfettario — the 15% flat tax (5% for the first five years of a new activity) that replaces IRPEF, IRAP, and IVA for those who qualify. In 2026 the regime didn't disappear, but the side-income test that disqualifies you if you also have employment or pension income just rose to €35,000.
That threshold matters more than the headline rate, because the forfettario is an in-or-out regime: if you cross it, you exit to the ordinary regime with IVA, estimated payments, and different accounting.
What Forfettario Actually Taxes
The regime does not tax profit as you measure it. It taxes deemed profit: revenue × a coefficient that depends on your ATECO code.
- ATECO coefficient: For many freelancers and consultants, 67–78% of revenue is deemed profit; for other activities, 40–86%. The coefficient is the taxable base.
- Flat rate: 15% on that base, or 5% for a new activity in the first five years if you meet the new-activity conditions (not a mere continuation of prior work).
- What's replaced: IRPEF (personal income tax) on that income, IRAP (regional tax), and IVA (VAT) on sales. You do not charge IVA, and you cannot deduct IVA on purchases.
- What's not replaced: INPS contributions remain, calculated on the same deemed profit base with a minimum, and withholding or local taxes may still apply depending on the activity.
Example: A freelance designer with ATECO coefficient 78% and €60,000 in revenue has a taxable base of €46,800. At 15%, tax is €7,020, plus INPS contributions on €46,800. At 5% in the first five years, tax is €2,340 on the same base. Under the ordinary regime, the same €60,000 with €18,000 in real costs might yield a different IRPEF result — the comparison is not flat 15% vs. 25%; it is flat 15% on deemed profit vs. progressive IRPEF on real profit.
2026: The €35,000 Side-Income Change
The regime historically disqualified anyone who also earned more than €30,000 in the prior year as an employee or pensioner, to block its use as a side-gig shelter while keeping a full-time job. In 2026 that threshold rose to €35,000.
Two effects:
- More dual earners stay in. A part-time employee who freelances on the side and earned €33,000 as an employee in 2025 now remains eligible for forfettario in 2026, whereas they would have been pushed out at €30,000.
- The prior-year test still controls. Eligibility for 2026 looks at 2025 revenue and 2025 side-income. A jump in 2026 employment income doesn't affect 2026 forfettario status, but it will affect 2027.
Other limits remain: revenue over €85,000 in 2025 (or prorated for a short year) disqualifies you for 2026, and certain participations in partnerships or controlled entities do as well.
Bookkeeping When There's No IVA to Track
Forfettario bookkeeping is simpler, but the simplicity creates its own risk: because you don't deduct real costs, you may stop tracking them.
Track anyway:
- Revenue by invoice, with no IVA. Your invoices must state the legal reference that they are without IVA under the regime forfettario, with the correct wording. Even though you don't charge IVA, the tax authority still checks that your invoices state the regime and that you didn't charge IVA.
- Real costs, even though not deductible. If you ever exit to the ordinary regime, the history of real costs becomes the basis for profitability analysis. A designer who thought 15% on deemed profit was cheaper may find ordinary taxation on real profit is actually lower once real expenses are high.
- The €85,000 and €35,000 watches: Keep a rolling 12-month revenue total and a prior-year side-income total. Set an alert at €75,000 and €32,000. Crossing mid-year forces an exit in the next year, not the current one, but the planning should start now.
- INPS contributions: Track the fixed and variable components separately; the minimum is due even in a low-revenue year.
When the Flat Tax Costs More Than Ordinary
The forfettario is attractive at low costs and moderate revenue, but it can be more expensive when real profit is much lower than deemed profit:
- A consultant with 78% deemed profit but 55% real costs has a taxable base of 78% while real profit is 45% — they overpay vs. ordinary.
- A freelancer with a new-activity 5% rate, even with high costs, often still benefits, but the five-year clock matters.
Model both regimes every December with actual cost data, not just the coefficient.
Keep Your Finances Organized From Day One
The forfettario rewards the freelancer who can see revenue, deemed profit, and real profit side by side, and who knows on which day in the year the next regime's thresholds are crossed.
Beancount.io keeps those views as plain text — revenue as transactions without IVA, real costs as tracked expenses, and deemed profit as a report, version-controlled and ready for the commercialista before December, not in April when the exit is already decided. Get started for free and make the flat-tax choice a calculation, not a guess.