Flat Tax Benefit Extended for Employees & Pensioners, Income Limit โRaised to โฌ35,000 – Potentialโ forโฃ Further Increase Stalled
Rome, โขItaly – Goodโ news for Italian โคemployees โฃand pensioners utilizing the regime forfettario (flatโ tax) scheme: the current income limit for accessing the 15% flat tax rate will beโ confirmed at โฌ35,000 for 2025 and possibly beyond. This re-proposal, building on a โtransitional rule already in effect since January of โขthis year, aimsโ to broaden access to the simplified taxation system for VAT โขnumbers.
Currently, the fully operational limit stands โขat โฌ30,000, andโค it remains unclear whether the โฌ35,000 threshold will become a permanent fixture. Details are pending the official text ofโฃ the Budget Billโข and โคits final approval by year-end. Though, the rule will apply to both โคnew applicants and existing flat-taxโค holders undergoing annual compliance checks for permanence.
Those with a VAT number who earnโฃ income from โemployment or similar sources (including pensions) up to โฌ35,000 in 2025 will be eligible to continue utilizing the 15% flat tax. Exceeding this limit โฃwill trigger aโ return to the ordinary โขtax โฃregime.
Despite advocacy from the League party for an increase to โฌ100,000, plans to raise the maximum income ceiling for โthe flat taxโ have been put on โhold. The โฃidea of increasing the threshold from theโข previously expected โฃโฌ85,000 does not appear in theโ 2026 budget.
This setback is attributed to new European Union regulatoryโ frameworks. As of January 2025,aโ new cross-border exemption regime allows Member โStates to offer a flat-rate regime of up to โฌ85,000 for domestic sales and โฌ100,000 โขfor intra-EU transactions.Crucially, individual โฃstatesโ no longer have the option to request derogations from these EU limitsโ – โa provision that โpreviously allowed Italyโข to โraiseโ the maximumโข income threshold.โค Thisโฃ change represents a “relevant โblock to each extension request” beyondโฃ the โฌ85,000 base, according to reports.
No statements regarding โa higher income limit were made during the presentation of the 2026 Budget Law, leavingโ the topic “off the radar” for now.
Readers interested in staying informed about Italianโค tax and โemployment benefits canโ sign โฃup for a free daily email newsletter โฃ or join the Tax Details Facebook group for โdiscussion and expert insights.
