A freelancer who works one year on Italy's flat tax and then leaves pays €508 more tax than one who stays, because the €10,167 of INPS paid after leaving deducts from nothing

A designer moves to Milan, opens a partita IVA on Italy’s flat-tax regime, the forfettario, and bills €50,000 in the first year. On 31 December they close it and go home. The following June they still owe INPS €10,167.30, the whole of that year’s pension contribution. Had they stayed, the payment would have come off the next year’s taxable income and saved €508.37 of flat tax at the 5% start-up rate. Gone, it saves nothing.123

On the standard 15% rate, which applies among other cases when the new practice merely continues earlier work, the same payment would have saved €1,525.10. Neither figure is a penalty. The contribution is owed either way; what disappears is the tax relief that normally goes with it.113

Why the whole year is paid after you go

A professional on the flat tax pays into the INPS Gestione separata, the pension scheme for the self-employed without a professional fund of their own, at 26.07% of the flat-rate income, here 78% of billing. Payments run on the income-tax dates. During the year, two advances of 40% each are paid, but each is 40% of the amount owed on “l’anno precedente”, the year before. A first year has no year before it, so nothing is paid during it, and the full €10,167.30 falls due as a balance in June of the second year.245

For someone who stays, this is the reason the second year’s bill is so heavy, covered in the piece on second-year cash. For someone who leaves, it means the whole first-year contribution is paid from abroad.

Why it deducts from nothing

Comma 64 of the 2014 law that created the regime deducts contributions versati, paid, from the flat-rate income, and sends any excess to the reddito complessivo, the person’s total income, under article 10 of the income-tax code. The 2026 return’s instructions ask for the contributions “versati nel presente periodo d’imposta”, paid in the year being declared. A payment made in June of year two belongs to year two’s return.167

Whether that return has anything to deduct it from depends on where the person is and what else they earn:

The second row is the usual case for someone going home, and the third closes the obvious way round it. Article 24 lets a non-resident deduct only the charges at letters a), g), h), i) and l) of article 10; compulsory contributions are letter e). The exception is a non-resident who earns at least 75% of their income in Italy, who is taxed as a resident, but that describes someone who kept working for Italy, not someone who closed.910

What it is worth

The relief lost is the payment multiplied by the rate a further year of the same practice would have paid. Because the regime is proportional, it is 1.0% of a year’s billing at the start-up rate and 3.1% at 15%, whatever the size of the practice:3

Put another way, the first year’s flat tax is charged on the full €39,000 of flat-rate income, €1,950, where a year with a year’s contributions deducted would owe €1,441.64. A practice that stays recovers the difference the following year. One that leaves never does.13

After a longer stay

From the second year on, each year’s advances cover 80% of its own contribution, so closing after two years or more leaves only the last year’s 20% balance to pay from abroad. At €50,000 that is €2,033.46, and the relief lost shrinks with it. A five-year stay ends the start-up rate, so the year that would have followed is valued at 15%.43

The contributions themselves stay with INPS whatever the length of stay, and become a pension claim rather than a refund; that is the subject of the piece on leaving Italy and INPS.

What this does not cover

The rules carry into 2027. The new consolidated income-tax code that replaces the old one on 1 January repeats comma 64’s sentence in its article 235, keeps compulsory contributions deductible at article 10, now letter f), and again leaves them off a non-resident’s list at article 26. A first year in 2026 whose contribution is paid in June 2027 meets the same treatment.12

The figures assume constant billing, the 2026 rate and coefficient throughout, and no advance paid for the year after leaving; an advance paid in that year would also fall in a year with no income. They cover professionals in the Gestione separata only. Artisans and traders pay a fixed minimum contribution during the year itself, so their pattern differs, and is not modelled. Nor is any surcharge, interest or penalty.

One question no document read for this piece answers: whether INPS would accept the balance paid early, before 31 December and before the return that works it out. The figures follow the calendar the law sets. They are the rules’ arithmetic, not advice on when to close or when to pay.56