The flat tax for self-employed workers and individual businesses could reach up to 100 thousand euros, but with a clarification: the obligation to apply VAT starting from 85 thousand euros.
It is one of the hypotheses being studied in view of the 2027 budget law which has yet to reach the Council of Ministers.
Flat tax up to 100 thousand euros, how the hypothesis works
The objective is to reconcile the increase in the limit of the flat rate regime, strongly supported by the League, with the European directive which sets the reference threshold for VAT benefits at 85 thousand euros.
Today the flat-rate regime provides for an ordinary threshold of 85 thousand euros of revenues or compensation. Those who comply with the requirements can benefit from a substitute tax of 15%, which drops to 5% for new activities in the cases provided for by the legislation. The system also allows you to determine the taxable income by applying a profitability coefficient linked to the Ateco code of the activity to the revenues or compensation.
In this way, the costs are not deducted analytically one by one, as happens in the ordinary regime, but are recognized as a lump sum. One of the advantages also concerns VAT. Those who operate in the flat rate regime, in fact, normally do not apply it on the invoice and are not required to comply with the related ordinary obligations, such as periodic payments, the annual declaration and communications of periodic payments.
With the hypothesis under study, the ceiling on revenues or compensation could rise to 100 thousand euros without extending all the benefits currently linked to the scheme up to that figure. The taxpayer would continue to pay the substitute tax on income, but would be required to apply VAT on transactions starting from the threshold of 85 thousand euros, with the related obligations. The flat tax and the preferential treatment for VAT purposes would therefore be separated.
For those who work mainly with other companies, VAT could be essentially neutral for the customer, when deductible according to the applicable rules. The case of a professional who invoices individuals is different and may find themselves having to choose between increasing the final price by 22% and absorbing the cost of the tax by reducing their margin.
What changes with the flat tax
In summary, if the reform passes:
- up to 85 thousand euros you remain in the flat rate regime with the expected benefits and without application of VAT on the invoice;
- over 85 thousand and up to 100 thousand euros remain in the flat rate regime until the end of the tax period and switch to the ordinary regime from the following year;
- over 100 thousand euros you immediately exit the subsidized regime with VAT applied according to the established rules.
Summing up: the range between 85 thousand and 100 thousand euros would become a range in which to continue to benefit from the preferential taxation on income while applying VAT.
Towards the CDM at the end of October
However, in view of the 2027 Budget, what has been said will have to face that reality bath called “hedging”. By the end of October the knot should be untied. And while the Government thinks, there is a very important deadline approaching: at the end of 2026 the increase from 30 thousand to 35 thousand euros in the income threshold from employment or pension expires which allows access to the flat-rate regime when you also carry out an activity with a VAT number. If it is not extended, the limit will return to 30 thousand euros, restricting the possibilities for those who want to combine a second job with their salary or pension.
