Flat tax: previous limits for benefiting from the new flat rate are “lifted.”
A small “revolution” in the flat-rate tax regime introduced by Law no. 190/2014, and not just the increase in the revenue or compensation threshold to €65,000. This is the provision included in the 2019 Budget Law, which must be approved by the end of the year. For those operating under this regime today, it is essential to understand not only the access requirements but also the current documentation requirements, as explained in our practical guide on how to issue an invoice under the flat-rate tax regime in 2026. The basic rules of the facilitated system remain anchored to the criteria defined in Article 1 of Law 190/2014 , which regulates the access thresholds and the causes of exclusion.
The legislator intends to completely replace paragraphs 54 and 55 of the aforementioned 2014 law. For example, it will no longer be necessary to verify that expenses incurred for employees or collaborators in the previous year did not exceed the threshold of €5,000. The overall cost of capital goods, which, prior to the amendment in question, could not exceed €20,000 (at the end of the financial year), will no longer be relevant.
A partial modification of the conditions that will prevent access to the ” new ” flat-rate regime is also expected. The conditions set forth in Article 1, paragraph 57, letters a), b), and c) of Law No. 190/2014 have remained virtually unchanged.
Individuals who use special VAT or flat-rate income tax regimes cannot apply the flat-rate regime. Non-residents are also excluded from the “new” flat-rate regime, with the exception of those residing in an EU member state or a state party to the Agreement on the European Economic Area that ensures adequate information exchange and who generate at least 75 percent of their total income in Italy.
The main changes concern the following subparagraphs (d) and (d)-bis, which have been completely replaced. As currently envisaged, it will also be impossible to access the flat-rate scheme if taxpayers (professionals and individual entrepreneurs) simultaneously participate in the business, partnerships, associations, or family businesses as defined in Article 5 of the TUIR. In this respect, the provision has not changed. However, two new limitations have been introduced. Mere ownership of a share in a limited liability company precludes the flat-rate scheme. Currently, however, this precondition applies only if the shareholding is in a limited liability company that avails itself of the transparency regime established in Article 116 of the TUIR. This new condition therefore precludes access to the flat-rate scheme, even if the taxpayer simultaneously participates in joint ventures.
Regarding letter d-bis), the current provision states that individuals who, in the previous year, received income from employment (pursuant to Article 49 of the TUIR) and similar income (pursuant to Article 50 of the TUIR, for example, pension income) exceeding €30,000 are not eligible for the flat-rate scheme. Verification of this threshold is irrelevant if the employment relationship has ended.
Under the new provision, the amount of income earned from employment or similar work is irrelevant. The new rule ensures that the employment relationship has not been transformed into a “fictitious” self-employment activity for the sole purpose of benefiting from a more favorable tax regime. Therefore, it will not be possible to benefit from the flat-rate scheme for individuals who have earned income from employment or similar work, as per Articles 49 and 50 of the TUIR (Consolidated Income Tax Code), and who carry out business, arts, or professions primarily from one of their employers in the previous two years, or, in any case, from entities directly or indirectly linked to them. For example, if 80 percent of the income comes from invoices issued to the former employer, this situation constitutes a reason for not applying for the flat-rate scheme. However, the mere possession of income from employment, independent of the amount thereof, as mentioned, does not constitute a reason for not applying.