Partita IVA for foreigners: the regime forfettario, in English

How the regime forfettario works

• Who can use it: freelancers and sole traders whose revenue in the previous year was €85,000 or less. If revenue passes €100,000 during the year, you leave the regime immediately.
• The rate: a 15% substitute tax that replaces income tax and regional surcharges. A new activity can pay 5% for its first five years, if it isn’t a continuation of work you already did.
• What it is charged on: your revenue multiplied by a fixed profitability coefficient for your activity code (ATECO), for example 78% for many professional and consulting activities. Actual expenses aren’t deducted.
• VAT: you don’t charge VAT on your invoices or file a VAT return. Invoices must still be issued electronically.
• Social security: INPS contributions are separate and on top. They are deductible from the taxable base.

What catches foreigners out

• The second year. In June of your second year you pay the balance for year one plus advance payments (acconti) towards year two. It is often the largest single tax bill people get, and the least expected.
• Your previous employer. If most of your revenue comes from an employer you worked for in the last two years, you can’t use the regime.
• Employment income. If you also had employment income above the annual limit in the previous year, you are excluded.
• Company stakes. Controlling an SRL whose activity is linked to your freelance work excludes you.
• Foreign accounts. Payments into a bank account abroad, or savings kept there, bring Quadro RW into your return.

What our €700 covers

Your annual return under the regime forfettario, the substitute tax and INPS calculations, the F24 payment forms including the acconti, a plain-English explanation of every figure, and one round of questions. Quadro RW, past years and bookkeeping are quoted separately.