How Much Does Italy's Regime Forfettario Really Cost?

Anyone who leaves a payroll job to go freelance, or steps into the labor market as self-employed from day one, and registers a VAT number under Italy’s regime forfettario already knows a substitute tax replaces the ordinary ones. What the headline rate alone doesn’t explain is how the actual bill gets worked out. Italy’s Revenue Agency (Agenzia delle Entrate) sets a single substitute tax on taxable income, replacing personal income tax (IRPEF), regional and municipal surtaxes, and the regional production tax (IRAP), at a standard rate of 15%. For the first five years of activity, the rate drops to 5% if certain conditions are met: no similar artistic, professional or business activity carried out in the previous three years; the new activity must not simply continue a job or freelance work already done before; and, when taking over an activity someone else started, the previous year’s revenue must stay under the threshold set for that sector.

What actually moves the final bill is something else: the tax isn’t calculated on revenue, but on taxable income obtained by applying a profitability coefficient that differs for each type of activity, according to the Revenue Agency’s official table. Wholesale and retail trade carries a coefficient of 40%; professional, scientific, technical, healthcare and education activities sit at 78%; construction and real estate reach 86%; trade intermediaries stop at 62%; food and beverage manufacturing stays at 40%, same as accommodation and catering services. At the same revenue, a higher coefficient produces higher taxable income, and therefore a bigger tax bill.

Practical example: a trader and a freelance professional both bill 30,000 euros in a year. The trader applies the 40% coefficient and ends up with 12,000 euros of taxable income; the professional applies the 78% coefficient and reaches 23,400 euros. At the same 15% rate, the trader owes 1,800 euros of substitute tax, the professional 3,510 euros: same revenue, an almost doubled bill.

The coefficient is therefore no minor technical detail: it’s the variable that decides, more than the rate itself, how much the scheme really costs for a given activity. The revenue thresholds in the official table are the original ones from the law, tied to the 2007 ATECO activity codes: anyone weighing whether to register for VAT should check, alongside the coefficient, the general revenue limit of the regime forfettario, which applies to every activity.

Alongside the substitute tax come social security contributions. For tradespeople and shopkeepers, INPS applies its own rates: in 2026, 24% for tradespeople and 24.48% for shopkeepers, calculated on a minimum income of 18,808 euros a year, revalued annually in line with consumer prices (the same mechanism that, on the other side of the ledger, drives the inflation people talk about when prices climb). Those who stay in the regime forfettario, if they already benefited from it the previous year and still meet the requirements, can request a 35% contribution reduction: it isn’t automatic, it has to be requested, and it remains a reduction, not an exemption from contributions. Freelancers without a professional pension fund of their own, enrolled instead in INPS’s Gestione Separata, pay different rates from tradespeople and shopkeepers: a dedicated Recap on regime forfettario INPS contributions covers that calculation in detail, including the Gestione Separata case, which this piece leaves aside for lack of a verified official source at the time of writing.

Finally, a few recurring fixed costs exist that no institutional source consulted quantifies in a single, consistent figure. The most common is the accountant’s fee, for handling the tax filings of someone in the regime forfettario: not required by law, but common in practice. Anyone running a business or trade activity typically also owes an annual Chamber of Commerce registration fee, of variable amount. For an up-to-date estimate of these items, it’s worth asking a professional directly, since costs shift with the type of activity and the region.

Taken together, the real cost of a regime forfettario VAT number doesn’t reduce to a single percentage: it depends on the profitability coefficient of the activity in question, whether the reduced rate applies, the INPS rates for that sector, and the running costs that sit outside the strict tax calculation.