Italian tax & business terms, in plain English

Italian income tax isn't only paid in arrears: each year you settle the balance (saldo) for the past year and prepay an advance (acconto) toward the current one — normally 100% of the prior year's tax, split into two instalments in June and November (Legge 97/1977). The forfettario substitute tax follows the same schedule.

On top of national IRPEF, Italy levies a regional surcharge (addizionale regionale, roughly 1.23%–3.33% depending on the region, instituted by D.Lgs. 446/1997) and a municipal surcharge (addizionale comunale, up to ~0.9%) on your taxable income.

A cassa previdenziale is the mandatory pension fund of a regulated Italian profession — lawyers, architects, accountants, doctors and others whose activity requires registration in an albo. D.Lgs. 103/1996 extended compulsory pension cover to those professions, and their members pay contributions to their own cassa rather than to INPS.

The Certificazione Unica (CU) is the annual certificate an Italian client acting as sostituto d'imposta issues for what it paid you: the gross sums, the ritenuta withheld, the deductions applied and the social-security contributions. Art. 4 of DPR 322/1998 requires it to be handed to the recipient by 16 March and also filed with the Agenzia delle Entrate.

An ATECO code classifies your business activity in Italy's official statistical taxonomy (ATECO 2025, in force since 1 January 2025, maintained by ISTAT). You pick one when you open your partita IVA. It drives your reporting obligations and, under the forfettario, the profitability coefficient (40%–86%) applied to your revenue.

The codice fiscale is a 16-character alphanumeric code identifying an individual to the Italian tax system — the equivalent of a personal tax/ID number, derived from your name and date and place of birth. It's required for almost any official or financial act in Italy, from opening a bank account to signing a lease.

Under the forfettario, you don't deduct real costs — instead a fixed coefficiente di redditività (set by your ATECO group, from 40% to 86%, per Law 190/2014) defines the share of revenue treated as taxable profit. The substitute tax then applies to that share.

The comunicazione unica is the single electronic filing that starts a business in Italy. Under art. 9 of D.L. 7/2007 you send it to the ufficio del registro delle imprese, and it stands as compliance with the registration, social-security and tax formalities at once — including obtaining the codice fiscale and the partita IVA.

Italy's relief for income already taxed abroad. Art. 165 TUIR lets a resident deduct foreign taxes paid definitively on foreign-source income from the Italian net tax due, up to the share of that tax which the foreign income represents in total income, computed separately for each foreign State.

The decreto flussi is the prime-ministerial decree that fixes how many non-EU nationals may be admitted to Italy each year for employed, seasonal and self-employed work. Art. 3, comma 4 of the immigration consolidated act requires it by 30 November of the preceding year, and self-employment visas are issued within those numerical limits.

Italy requires invoices to be issued electronically as a FatturaPA XML file, transmitted through the Sistema di Interscambio (SdI) — the Agenzia delle Entrate's hub that validates and delivers them. Since 2024 this applies to virtually all partita IVA holders, including those on the forfettario.

The neo-residenti regime (TUIR art. 24-bis) lets wealthy individuals who move their tax residence to Italy pay a flat annual substitute tax on all foreign-source income — €200,000/year for arrivals through 2024, raised to €300,000 from 2026 — for up to 15 years, regardless of how much foreign income they earn.

Imposta di bollo is Italy's stamp duty (DPR 642/1972). Because forfettario invoices carry no VAT, they need a €2 stamp duty when the invoice total exceeds €77.47 — applied on the e-invoice as a virtual stamp (bollo virtuale) rather than a physical one.

The gestione artigiani e commercianti is the INPS pension fund for shopkeepers, traders and artisans — the business side of self-employment, not the professional one. Law 233/1990 sets the contribution as a share of the business income you declare for IRPEF, but on a statutory minimum income floor, and income above the pension ceiling counts only in part.

The Gestione Separata, created by Law 335/1995, is the INPS pension fund for self-employed professionals who have no dedicated professional fund (cassa). In 2026 the contribution rate is 26.07% of taxable income, paid by the freelancer, within a minimum and maximum income base set each year.

IRAP is the regional tax on productive activities (D.Lgs. 446/1997), historically charged on a business's net production value at a standard 3.9% rate. Since 2022 individual sole traders and self-employed professionals are no longer subject to IRAP.

IRPEF is Italy's progressive personal income tax, set by the Income Tax Code (TUIR). For 2026 the brackets are 23% up to €28,000, 33% from €28,000 to €50,000 (cut from 35% by the 2026 Budget Law), and 43% above €50,000, reduced by deductions (detrazioni). Regional and municipal surcharges (addizionali) apply on top.

IVA is Italy's value added tax, governed by DPR 633/1972. The standard rate is 22%, with reduced rates of 10%, 5% and 4% on specific goods and services. Most businesses charge IVA on sales, deduct it on purchases, and remit the difference periodically.

The F24 is the unified form used to pay almost all Italian taxes and social contributions — IRPEF, the forfettario substitute tax, IVA, INPS — and to offset credits against debts. It's filed electronically, typically through your bank's home banking or the Agenzia delle Entrate's online services.

A partita IVA is the 11-digit number Italy issues to anyone carrying on regular self-employed or business activity. You declare the start of activity (dichiarazione di inizio attività, art. 35 of the VAT decree) to the Agenzia delle Entrate, choosing your ATECO code and tax regime. It is distinct from the personal codice fiscale.

The permesso di soggiorno is the permit a non-EU national needs to stay in Italy beyond a short visit. Art. 5 of the immigration consolidated act (D.Lgs. 286/1998) has you apply to the questore of the province you are in within eight working days of entry; it is issued for the activities your entry visa covers.

A rappresentante fiscale is a person or company resident in Italy appointed by a non-resident business to carry out its Italian VAT obligations. Art. 17 of the VAT decree lets a business with no permanent establishment here act either directly, once identified under art. 35-ter, or through such a representative.

Ravvedimento operoso (D.Lgs. 472/1997, art. 13) lets a taxpayer voluntarily correct a missed or late payment or filing by paying the tax due plus interest and a reduced penalty. The sooner you regularise, the smaller the penalty reduction.

The regime forfettario is Italy's flat-rate tax scheme for sole traders (partita IVA) earning up to €85,000 a year. You pay one substitute tax — 15%, or 5% for the first five years of a genuinely new activity — on a fixed share of revenue set by your ATECO code, replacing IRPEF, its regional/municipal surcharges, and VAT.

The impatriati regime is a tax break for people who move their tax residence to Italy after living abroad. Under the rules in force from 2024 (D.Lgs. 209/2023), 50% of qualifying Italian-source income (up to €600,000/year) is exempt from income tax for five years — rising to 60% exempt if you relocate with a minor child.

The regime ordinario is Italy's standard tax regime: instead of a flat rate, you pay progressive income tax (IRPEF) on actual profit, plus regional and municipal surcharges. You can deduct real business costs and reclaim VAT, but bookkeeping is heavier. It is governed by the Income Tax Code (TUIR, DPR 917/1986).

The regime semplificato (contabilità semplificata, DPR 600/1973) is the middle option between the forfettario and full ordinary accounting. You keep simplified, largely cash-basis ledgers and pay IRPEF on actual profit. It's the default for smaller businesses above the forfettario thresholds that aren't required to keep full books.

Italian tax residency (TUIR art. 2) is triggered if, for more than 183 days in a year, you are registered as resident, or have your domicile (centre of personal/economic interests) or habitual abode in Italy. Tax residents are taxed on worldwide income; non-residents only on Italian-source income.

Reverse charge (inversione contabile, DPR 633/1972, art. 17) shifts the obligation to account for VAT from the seller to the buyer. It's common in cross-border B2B services within the EU and in certain domestic sectors: the supplier invoices without VAT and the customer self-accounts for it.

Ritenuta d'acconto is a withholding tax: when a freelancer under the regime ordinario invoices an Italian business or professional (a sostituto d'imposta), the client withholds a share of the fee — 20% for most professional services — and pays it to the tax office as an advance on the freelancer's income tax (DPR 600/1973, art. 25).

SPID is Italy's public digital identity system, used to log in to the Agenzia delle Entrate, INPS, and most public services online. It's issued by accredited private providers after identity verification.

An SRL is an Italian limited liability company (Codice Civile, artt. 2462 ff.); the SRLS is its simplified variant, which can be formed with as little as €1 of capital and a standard statute, cutting notary costs. Both shield the owner's personal assets and pay corporate tax (IRES) plus IRAP.