Free invoice generator and tax tools for Italy

A small business in Italy meets four main charges. Income is taxed by the Agenzia delle Entrate through IRPEF (imposta sul reddito delle persone fisiche) on the owner's total income, with regional and municipal surcharges on top, unless the owner uses the flat-rate regime forfettario. VAT (IVA) is also collected by the Agenzia. Pension contributions are collected by INPS, the national social-security institute.

The latest reform is the 2026 budget law, Legge 30 dicembre 2025, n. 199, in force since 1 January 2026. It cut the middle IRPEF rate, for income between 28,000 and 50,000 euro, from 35% to 33%, and added a mechanism that cancels the benefit for total income above 200,000 euro.

VAT legislation is being recast. The Testo unico IVA, D.Lgs. 19 gennaio 2026, n. 10, was published on 30 January 2026 and applies from 1 January 2027. Until 31 December 2026 the rules of DPR 633/1972 still govern invoices and VAT returns, and the tax penalties have been gathered since 1 January 2026 in the Testo unico sanzioni tributarie, D.Lgs. 173/2024.

The regime forfettario is the flat-rate scheme for individuals in business or a profession. Taxable income is not worked out from costs: revenue is multiplied by a profitability coefficient set for the activity in allegato 2 to Legge 145/2018, and compulsory social-security contributions are deducted from the result. A single substitute tax then replaces IRPEF and the regional and municipal surcharges. Family-business income is taxed on the entrepreneur, before the shares paid to relatives. Some people cannot join: non-residents (with an EU or EEA exception), people mainly selling buildings, building land or new vehicles, partners in partnerships or controllers of certain limited companies, and people working mainly for a current or recent employer. Income taxed under the regime still counts whenever a benefit depends on an income test. The scheme ends the year after any requirement stops being met. Source: Agenzia delle Entrate, page updated 21 July 2026.