Because freelancers are not Solar Staff's employees and we don't pay taxes on their payouts, they must declare any income received via Solar Staff by themselves.
To carry on tax accounting in Italy for your Solar Staff income, you need to:
Tax residence in Italy
An Italian resident is an individual who meets at least one of the following conditions:
Spends more than 183 days in Italy during a calendar year (tax period)
Has their center of business and vital interests in Italy (real estate – either ownership or long-term lease, family, or underage children's place of study)
Italy has double taxation agreements with a number of countries (full list), the provisions of which may override the applicable tax residence rules and other provisions of national legislation.
Taxpayer ID number
In Italy, a taxpayer identification number (codice fiscale) consists of 16 digits and is assigned to all citizens when identification documents are issued. A taxpayer ID number can also be assigned to foreign citizens to pay taxes and interact with Italian government bodies. Foreign citizens can obtain their number in the country of residence at the Italian consulate or at the Italian Revenue Agency (Agenzia delle Entrate). To obtain a taxpayer ID number, you need to fill out an application (modelloAA4/8 form). Applications are usually processed within around two business days.
The VAT registration number (partita IVA) is required for value-added tax payers (freelancers and sole proprietors). This number consists of 11 digits. To receive it, you must fill out an AA9/7 form for registration/termination of business and change of data (dichiarazione di inizio attività, variazione dati o cessazione dell’attività) and have it submitted to the Revenue Agency within 30 days after you start your activities. After that, you can check your VAT registration number here.
Taxes and contributions payable by freelancers
Tax liabilities depend on the chosen tax status and/or eligibility for certain criteria. To receive income via Solar Staff, freelancers need to be registered as a:
Freelancer (libero professionista)
Sole proprietor (ditta individuale)
IMPORTANT! Solar Staff does not have the option to choose a tax status for freelancers based in Italy, but you can fill in your taxpayer ID in your account.
Read on for more details.
Freelancer
A freelancer (libero professionista) does not need to register with the Italian Business Register (Registro delle Imprese), but must obtain a VAT identification number to start activities. Freelancers must also choose their economic activity code (codice ATECO) and register with the Italian National Institute for Social Security (Istituto Nazionale della Previdenza Sociale – INPS).
A freelancer status is a good option for individuals who receive income from intellectual activity, such as consulting or legal services.
Italy has the following tax regimes for freelancers:
General tax regime
Freelancers in Italy who opt for this regime must pay the following taxes:
Personal income tax (imposta sul reddito delle persone fisiche) at progressive rates:
Taxable income, EUR | Tax rate, % |
28,000 or less | 23% |
28,001–55,000 | 35% |
55,001 and more | 43% |
You can deduct the amount of expenses related to entrepreneurial activity from the amount of income you receive and claim tax benefits, such as the benefit for the self-employed:
Income, EUR | Benefit, EUR |
5,500 or less | 1,265 |
5,501–28,000 | 500 + 765 x (28,000 – gross income) / 28,000 – 5,500 |
28,001–50,000 | 500 + 765 x (50,000 – gross income) / 50,000 – 5,500 |
55,001 and more | 0 |
Tax returns and payment. Taxpayers are required to file their tax returns using the Modello REDDITI PF form by October 15 of the year following the reporting year. For instructions on filling out the return, go here. You can fill out and submit your return online using the Redditi PF Web service or the Redditi PF Online program. Learn more about how to pay the tax here.
There is also a regional tax of up to 3.33% and a municipal tax of up to 1%. Each region and municipality sets their rate independently within the range established by national laws. To learn more, see here.
VAT (imposta sul valore aggiunto – IVA) is payable on income received from the provision of services and sale of goods, but some activities are exempt. These include international services – no VAT is charged. To learn more about activities exempt from VAT, see here.
The standard VAT rate is 22%, but some types of services and goods are taxed at a reduced rate of 10%, 5%, or 4%.
Tax returns and payment. Italy's laws and regulations on VAT set out the following types of tax returns:
F24 (modello F24) return: filling the return and paying the tax must be done monthly or quarterly before the 16th day of the month following the end of the tax period (month or quarter). Learn more here. Freelancers whose revenue for the previous tax period was below EUR 500,000 must file VAT tax returns on a quarterly basis. With some exceptions, VAT is payable before December 27 of each year. Those who file their returns each month and each quarter must pay their VAT for December and the fourth quarter respectively.
Annual VAT return (modello IVA base): it is filed between February 1 and April 30 of the year following the reporting year. For instructions on filling out the return, go here. The VAT amount shown in the annual tax return must be paid before March 16 of the year following the reporting year.
Social security contributions (contributi) are payable to the INPS at a rate of 26.07%.
To pay, freelancers must register with the INPS. Go through the following steps to obtain your registration:
Register on the official website using a SPID digital identifier
Go to the Servizi per il cittadino section, fill out the application, and submit it
Get a confirmation email at the address you provided when signing up
Declaring and paying contributions. There is no separate accounting for social security contributions. Two payments must be made to pay the contributions:
June 30 (moved to July 31, 2024): payment of the remaining contributions for 2023 and a 50% advance payment for 2024.
November 30: payment of the remaining part.
Accounting. Requirements depend on the tax regime you have chosen:
Ordinary regime (regime ordinario) | Simplified regime (regime semplificato) |
Available to freelancers on a voluntary basis when income from services and other income exceeds EUR 500,000 and EUR 800,000 respectively. | Available to freelancers when income from services and other income is within EUR 500,000 and EUR 800,000. Freelancers can use the simplified regime with no cap on the total income they receive. Sole proprietors must comply with the income thresholds. |
When applying this regime, freelancers must:
| When applying this regime, freelancers must:
|
Flat-rate regime (forfettario)
This is a special tax regime that freelancers can apply for the first five years of being active.
Limitations and conditions. To use this regime, you must meet the following criteria:
Your income for the calendar year must not exceed EUR 85,000 (the threshold is determined pro rata the number of days of doing business during the year)
For freelancers who also earn an income as employees, the total income from freelancing must not exceed EUR 30,000
Freelancers must not have any annual expenses outstanding for more than EUR 20,000, including payments to employees or contractors
At least 75% of your income must come from local sources (Italy)
To apply for the flat-rate regime, you need to state your intention to do so by submitting a modello AA9/12 application when obtaining your VAT number. To switch from the general regime to the flat rate, you need to make sure your activities meet the regime's requirement and then to start keeping accounts and issuing invoices in line with these requirements. No separate application to switch to the flat-rate regime is needed.
IMPORTANT! You can only switch to a new tax regime after three tax periods (three years).
Freelancers in Italy who opt for the flat-rate regime must pay the following taxes:
Personal income tax (imposta sul reddito delle persone fisiche) at a reduced rate of 5%. The reduced rate is only applicable for the first five years after the start of your activities. From the sixth year onwards, the tax rate goes up to 15% and is a fixed one. Under this regime, your income is not subject to any additional regional or municipal taxes.
The tax rate can be additionally reduced for certain types of activities. For example, if you are a freelancer providing financial services, the personal income tax will apply only to 78% of your income.
IMPORTANT! When applying the flat-rate regime, you may not deduct business expenses from your taxable income.
VAT (IVA): This regime is VAT-exempt.
Social security contributions are paid the same way as under the general tax regime. The only difference is that freelancers that apply the flat-rate regime are eligible for a 35% discount on their contributions.
The flat-rate regime has no requirements for either accounting or issuing electronic invoices.
Sole proprietor
Doing business as a sole proprietor (ditta individuale) is available both for individuals and legal entities engaged in manufacturing of goods or provision of services.
The main benefits of sole proprietorship include low costs, no minimum capital requirement to start the business, and simpler accounting. However, sole proprietors are held personally liable for the obligations of the business.
IMPORTANT! Services via Solar Staff are legitimate for individuals only; otherwise, accounting documents will be issued in the name of Solar Staff account holders and not the actual recipient of income.
Registration. Before starting the business, sole proprietors need to:
Register with the Italian Business Register
Obtain a VAT number
Obtain all necessary permits and licenses if needed
Register with the INPS
Register with the National Institute for Insurance against Accidents at Work (INAIL)
Learn more about the registration process here.
For the purposes of paying taxes and social security contributions, sole proprietors can choose either the general or flat-rate regime and pay the same taxes and contributions as freelancers. The only exceptions are:
Social security contributions (contributi) are payable to the INPS and the INAIL depending on the sole proprietor's business:
Contributions to the INPS: if the annual income is below EUR 17,504, you need to pay a fixed contribution of EUR 4,200; for anything above that threshold, you need to pay the EUR 4,200 plus 24% of any income that exceeds the threshold.
Contributions to the INAIL: these are payable if you have employees (learn more).
Additional details
Income received through Solar Staff is declared using certificates and invoices, and in accordance with the offer agreement.
If you have any questions, get in touch via the chat in your Solar Staff account or email us at [email protected].