Flat-rate scheme and regime forfettario: how it works and to whom it is convenient

da Marco Vergani | Feb 6, 2019 | Taxation in Italy

The Budget Law 2019 amended the regime forfettario previously introduced by the 2015 Stability Law. In particular:

• the threshold of revenues / compensation that allows access to the regime was raised to € 65,000
• the access requirements relating to the cost of personnel and capital goods have been eliminated
• some impediments concerning the performance of work activities and the holding of shareholdings were reformulated.
  The regime forfettario makes it possible to apply a single substitute tax on income, with a rate of 15% (5% for the first 5 years of business), replacing those ordinarily provided (Irpef).
  From 2020, on the other hand, it will be fully introduced the 20% flat rate for individual and professional entrepreneurs who, in the year prior to the access, have earned revenues or received compensation, adjusted for each year, between 65.001 and 100.000 euros.
  
  Taxpayers who can access the flat-rate scheme can:
• start a new business activity, art or profession and that presume to achieve revenues or fees not exceeding 65,000 euros;
• have already started an activity if they have achieved revenues / compensation below the threshold of 65,000 euros.
  
  If several activities are carried out, which are distinguished by different ATECO codes, the sum of the revenues / compensation relating to the various activities carried out must be considered.
  Since the flat-rate scheme is a natural regime, taxpayers who are already engaged in business, art or profession access it without the need for any communication.
  
  Subjects can not access the lump-sum scheme:
• making use of special schemes for VAT purposes or for flat-rate income-setting schemes;
• non-residents (with the exception of those residing in an EU or EEA State, which ensures an adequate exchange of information, which produce in Italy at least 75% of the total income produced
• that carry out, exclusively or prevalently, operations for the sale of buildings or portions of buildings, building plots or new means of transport;
• who participate simultaneously in partnerships, professional associations or family businesses, or that directly or indirectly control S.r.l. o Associations in participation, which carry out economic activities directly or indirectly related to those carried out by the business activities of the arts or professions;
• physical persons whose activity is mainly carried out in respect of employers with whom work relations are ongoing or during the previous two tax periods, or in relation to persons directly or indirectly attributable to such employers of work.
  
  The lump-sum regime ceases to be effective starting from the year following the one in which the access requirement is terminated, or a cause of exclusion occurs.
  For VAT purposes, the adoption of the flat-rate scheme involves a series of simplifications, including the exemption from the obligation of electronic invoicing. The numbering and preservation obligations of the purchase invoices and the customs bills, the certification of the fees and the integration of the invoices for the operations for which tax is payable (with an indication of the rate and relative tax) remain in place.
  For accounting purposes, the lump-sum regime exempts from registration and keeping records. Taxpayers who adopt it do not apply sector studies and parameters, do not operate withholding taxes or undergo withholding taxes.