Getting into the flat-rate scheme and getting out of it

Giulia, a graphic designer in Bologna, closed 2025 with 84,600 € of fees and stays in the regime forfettario for 2026. Her colleague Marco collected 85,300 € and goes back to the ordinary regime in 2026, with VAT on his invoices and books to keep. Seven hundred euros apart, one line on the Agenzia delle Entrate page, and two tax years that no longer look alike.

A default scheme, not an election

The regime forfettario is a favourable tax scheme reserved for individuals carrying on a business, an art or a profession. Companies cannot use it. Someone opening a partita IVA as a sole trader or as a self-employed professional is its typical user, whether a plumber, a translator or a web developer.

The word that matters on the Agenzia delle Entrate page is naturale. Anyone who meets the conditions is inside the scheme without having asked for anything. There is no application to file and no approval to wait for: the scheme applies because the conditions are met, and stops applying when they no longer are.

That feature has a practical consequence many people underestimate. No office checks the conditions on your behalf. It is up to you, year after year, to confirm you are still under the thresholds and clear of the exclusions, and to state as much in your income tax return.

The rules in this module are those served by the Agenzia delle Entrate on the page updated on 21 July 2026 and read on 24 September 2026. The statutory basis is article 1, paragraphs 54 to 89, of Law no. 190/2014, which the Agenzia itself quotes in its guidance on electronic invoicing.

The two conditions of the previous year

Entry requires two conditions to be met at the same time, and both refer to the previous year. The first concerns size: revenue earned or fees received of no more than 85,000 euros. The second concerns staff: spending of no more than 20,000 euros gross on the work of others.

At the same time is not a figure of speech. Meeting one condition alone is not enough. A plumber with 60,000 euros of revenue who paid an apprentice 24,000 euros gross stays out, even though he is far below the first limit. The scheme rewards a business that is small on both counts, not in turnover only.

Annualising closes an easy loophole. Someone who opened a VAT number in September and collected 40,000 euros in four months cannot claim to have stayed under the threshold: scaled to twelve months, that pace runs well past the limit. The threshold measures the size of the business, not the length of its first year.

Adding activities together closes another. A photographer who also teaches workshops, under two ATECO codes, does not test each activity separately against 85,000 euros. The total is what counts. This matters the day a side activity is added to the main one without much thought about the consequences.

The limit is worded as not higher than. Exactly 85,000 euros is still allowed; a single euro more and you are out. In borderline cases it is worth redoing the sum from the invoices actually paid rather than from an estimate, because the line is sharp and nobody will round it in your favour.

• Employees, including apprentices and fixed-term staff
• Casual or ancillary work
• Fees paid to collaborators, including project-based ones
• Profit shares paid to partners who contribute work only
• Amounts paid for work done by the business owner or by family members

The list above gives the items that count toward the 20,000 euro limit, as the page sets them out. The threshold is gross: what matters is what the work of others cost the business, not what reached the worker's pocket after deductions.

Anyone working alone never notices this second condition, because the spending is nil. It becomes decisive on the day a helper is hired, even part-time. Before signing a contract it pays to work out the gross annual cost and compare it with the limit, knowing that the effect only lands the following year.

The exclusion grounds

Meeting both thresholds is still not the end of the test. The page lists situations that bar anyone in them from the scheme, whatever their turnover. These are the exclusion grounds, and they deserve the same care as the numerical limits, because a single one of them is enough to keep you out.

• Individuals using special VAT schemes or flat-rate methods of computing income
• Non-residents, except residents of the European Union or of the European Economic Area with adequate exchange of information who earn at least 75 % of their total income in Italy
• Anyone whose sole or main activity is selling buildings, building land or new means of transport
• Anyone who holds interests in partnerships, professional associations or family businesses, or controls an SRL, carrying on activities linked to their own
• Anyone working mainly for their current employer or for an employer of the two previous tax periods
• Anyone whose employment or similar income in the previous year exceeded the limit

The ground about holdings most often catches people out. It does not exclude everyone owning a share in a company. It excludes those in a partnership or a family business, or controlling an SRL, when that entity carries on activities traceable to the one they run personally. The link between the two activities is what to check.

The ground about a former employer targets a common move: an employee resigns and keeps working for the same firm with a VAT number. If the work goes mainly to that employer, current or of the two previous tax periods, the scheme is closed to them, however modest their fees.

The page makes one precise exception: someone starting a new activity after completing the compulsory traineeship required to practise an art or profession. A trainee who, once qualified, keeps working for the practice where they trained does not fall under the exclusion.

The employment income limit

The last exclusion ground concerns anyone running a VAT number alongside a job. Excluded is whoever received employment or similar income above 30,000 euros in the previous year. For the years 2025 and 2026 the page raises that limit to 35,000 euros.

Here too the wording matters: exactly 30,000 euros, or 35,000 in the years under the raised limit, does not exclude. The income compared is that of the previous year, the same year on which revenue and staff spending are measured, so the whole test looks back at one closed year.

The page does not say in so many words whether 2025 and 2026 are the years the scheme is applied or the years the salary is earned. The ActioFin calculator reads the raised limit as tied to the year of application and says so among its assumptions. In borderline cases, check.

The limit does not apply if the employment ended during the previous year, provided that in that same year no pension and no income from another employment was received. That is the position of someone who leaves a job to set up on their own account.

Getting in: an existing business and a new VAT number

Someone already in business who meets the conditions enters the scheme with no notice at all, neither before nor after. This follows directly from its default nature: there is nothing to ask for, you simply apply it from 1 January of the year in which the conditions are met.

Someone opening a VAT number has no previous year to be measured against. They can still enter, by stating in the start-of-activity return, form AA9/12, that they expect to meet the conditions. The statement is a registration detail, not an election: it tells the Agenzia which scheme you operate under.

Leaving that box empty does not bar you from the scheme. The page adds, however, that the omission carries an administrative penalty of 250 to 2,000 euros. The form is therefore worth filling in carefully, even though the mistake would not change the scheme that applies to you.

The moment you certify that you meet the conditions and fall under no exclusion ground is the annual income tax return. That is where the statement carries weight, not at opening: whoever signs it declares having checked every condition for the year concerned.

Getting out: next year or straight away

The general rule is that the scheme stops applying from the year after the one in which even a single condition fails or an exclusion ground arises. Someone who collects 92,000 euros in 2026 stays in the flat-rate scheme for the whole of 2026 and moves to the ordinary regime on 1 January 2027.

A higher threshold changes the timing, though. If revenue or fees of the current year go above 100,000 euros, the scheme stops applying in that very year. There is no waiting for January: the exit happens during the year in which the threshold is crossed.

An immediate exit brings VAT with it. The page says that in that case the tax is due from the transactions that cause the ceiling to be exceeded. The invoice that takes you over 100,000 euros is already an invoice carrying VAT, and so is every one after it.

For anyone nearing that threshold late in the year the effect is concrete. A quote signed in October without VAT can become, in December, an invoice on which VAT is due. Anyone selling to private customers, who cannot recover the tax, may end up paying it out of their own fee.

Leaving by choice: the option for the ordinary regime

Someone entitled to the flat-rate scheme may also give it up and compute income tax and VAT in the ordinary way. That can suit a business with high real costs, since actual expenses are not deductible under the flat-rate scheme, or one buying goods that carry a lot of VAT it would like to recover.

The option is exercised by conduct, that is, by actually applying the ordinary regime. It must then be reported by ticking the relevant box of the annual VAT return filed after the choice. Forgetting to report it does not undo the option, but it exposes you to the same penalty of 250 to 2,000 euros.

The choice binds. The option for the ordinary regime runs for at least three years and, once that minimum has passed, stays valid year by year for as long as it continues to be applied. You do not step in and out every year according to what looks cheaper at the moment.

The 2026 rules and the texts that are changing

Everything this module teaches is the 2026 rule, read on pages served by the Agenzia delle Entrate. The raised 35,000 euro limit is written for 2025 and 2026; for later years the page gives only the standard limit. Any extension will have to be read once it is published, not assumed.

Italian tax legislation is also in the middle of a recodification. The Gazzetta Ufficiale records the repeal of the consolidated income tax act by Legislative Decree no. 117/2026, and a new consolidated VAT act has been adopted. This course does not anticipate what the new texts will say.