Being a freelancer from Italy is becoming a more common decision among expats and digital nomads. This guide will help you prepare for all the requirements and review your options.
There are various factors that determine your decision of becoming a freelancer, like flexible hours, higher pay or freedom to work from anywhere. Having said so, you cannot pack your computer and work from just anywhere, without a minimum level of compliance, including paying your taxes.
More digital nomads are picking Italy as their country of destination due to two main attractive tax regimes:
Basically you can move to Italy, be a freelancer, and save on your annual tax bill. Please follow this guide to understand how to start your freelancing business in Italy.
The first step to start freelancing in Italy is to obtain the Partita IVA. This is your VAT number (and EORI for international transactions), and every business, company or freelancer needs to have one. You can apply online, or you can use a Commercialista to help you with that. The minimum requirements are:
Italy has a quite complicated definition of tax residency; however, oversimplifying this concept, you are defined a tax resident if you spend (or are registered) for more than 183 days in Italy per tax year. Please be sure to discuss this matter with a tax professional.
As a EU citizen, you can obtain Italian tax residency quite easily as you can move to Italy without any specific requirements; if you are a non EU citizen, you must have a valid long term VISA to enter the country.
Note that you can obtain your Partita IVA if you hold a study VISA as there are no limitations to trade as a freelancer while you study in Italy. Furthermore, once you complete your studies, you can obtain a lavoro autonomo residence permit allowing you to stay in Italy without returning to your home country processing a new VISA.
Finally, in order to renew your residence permit you must disclose a minimum taxable income (revenue-costs) in excess of € 5700 (the amount is adjusted every year for inflation).
You are required to register at the Chamber of commerce if you provide Commercial or Artisanal activities, therefore if you are a freelancer such as a designer, programmer, accountant etc. you are not required to register at the chamber of commerce, as well as avoid any annual contribution fee (€ 120).
If you operate in Commerce or Artisanal activities you are required to make 4 annual equal payments of roughly € 1000, on top of 24,48% rate for income in excess of € 17 504 up to € 86 983. If you opt for the regime forfettario, you can apply for a 35% reduction of such amounts due; beware that these amounts are due if you don’t generate any income. Alternatively, you are due to register at the Gestione Separata paying a flat 25,98% rate up to € 103 550. However, if you don’t generate any income, you are not due to pay anything. If you are fully employed in another full time employment, you can waive such payments. In addition, the paid Social Security is a deductible item against income, lowering your taxable income (it generates tax savings). Note that if you are a US citizen you must remain under the US Social Security system.
As a freelancer in Italy, you are not required to pay any fee/tax at Partita IVA setup. Depending on the tax regime you opted for you may have to deal with VAT returns. VAT is due quarterly (for earnings up to € 400,000) at the following dates:
|Quarter||Payment due||VAT return due|
|Q1||May 16th||May 31st|
|Q2||August 20th||September 30th|
|Q3||November 16th||November 30th|
|Q4||March 16th||February 28th|
Note: The annual VAT return is due on April 30th of the subsequent tax year.
The tax return deadline is November 30th of the subsequent tax year; however, in Italy you must pay taxes BEFORE you lodge the tax return. On June 30th you must pay the balancing payment of taxes, on top of a 40% payment on account for the current year (which can be spread in up to 6 instalments), while the remaining 60% payment on account is due on November 30th.
Such amounts are recovered in the subsequent year tax return.
Regardless of your tax regime of choice, Italy has introduced a new e-invoicing system for invoicing. This does not mean that you need to issue invoices in soft copies, but rather in .xml and to route them through the Tax office portal (SDI system).
Using this infrastructure requires you to route the invoices through a SDI code (7 digits) allowing your client in Italy to collect the invoice from their online tax office portal. You can use the tax office platform, or any other platform integrated with the tax office facilities.
Given how complicated this system is, along with the language barrier, we've created a simple solution for you, E-invoicing through MyFattura.
We offer you the easy solution for creating your invoices in PDF and XML. You can also send your XML invoice to the tax office directly through our app.