ITALY - 2019 Budget Act - Italy introduces a new flat regime for entrepreneurs and self-employed workers
The Italian budget law introduced an attractive tax scheme for entrepreneurs and self-employed professionals. A flat tax rate of 15% for taxpayers who in the previous fiscal year did not exceed the relevant income threshold of EUR 65,000. This will be applicable from 11 January 2019
A second tax regime has been introduced on an analytical basis for taxpayers who in the previous fiscal year earned income over EUR 65,000 but below EUR 100,000. In this case a proportional flat tax of 20% is envisaged. The analytical tax regime will be in operation starting from 2020. Specific requirements will have to be met in order to benefit from this.
In both cases the flat tax (15% and 20%) will substitute any Personal Income Tax (State, Regional and Communal tax). This ranges from 23% to 43%.
The new tax schemes introduced by the Italian budget law for 2019 will have a strong impact on the tax planning of individuals and will require a case by case analysis in order to better investigate the possible scenarios for taxpayers. In fact, the tax reliefs introduced require a detailed analysis to be undertaken in order to be compliant with the requirements set out.