The flat-rate scheme in Turin
What you pay and what you do not pay when you register under the flat-rate scheme in the city.
Open30 September 2026 · Flat-rate scheme
Flat-rate scheme in Turin: three cases when it is not worth it
The flat-rate scheme (regime forfettario) has a solid reputation: very little bookkeeping, no VAT on your invoices, and a substitute tax in place of IRPEF (Italian personal income tax). For many holders of a partita IVA (Italian VAT number) it really is the right choice. There are, however, three recurring situations in which the apparent saving turns into a cost, and it pays to recognise them before you register.
01 · The mechanism
Why the flat-rate scheme always looks like the obvious choice
Under the flat-rate scheme your income is not calculated by subtracting your actual costs from your revenue. Instead, a profitability coefficient, fixed by law according to your ATECO code (the Italian activity classification code), is applied to the revenue you have collected, and contributions and substitute tax are then paid on that income. The costs you really incur do not count: the coefficient already takes them into account on a flat basis, whether you have them or not.
On top of this come some real practical advantages: no VAT to charge and settle, no VAT registers, and a reduced rate for new activities that meet the required conditions. If you work with low costs and private clients, the numbers almost always add up.
The point is that those advantages have a flip side, and the flip side weighs differently from one person to the next. The page on the flat-rate scheme in Turin explains what you pay and what you do not pay in the city; here we look at the cases in which the final balance goes the other way.
02 · First case
First case: your real costs are higher than the ones recognised
The coefficient assumes a certain share of costs. If your costs are lower, the flat-rate scheme grants you a deduction you never actually had; if they are higher, you pay tax and contributions on income that in reality you did not earn.
An example with round figures, purely for illustration. A trading business collects €60,000 in a year. Let us assume a coefficient of 40%: the flat-rate income is €24,000. If, however, between stock, shop rent, utilities and transport the real costs come to €45,000, the actual income is €15,000. Under the flat-rate scheme tax and contributions are calculated on €24,000; under the ordinary or simplified regime they would be calculated on €15,000.
This comparison alone is not enough to decide, because the two regimes apply different rates. But when the gap between presumed income and real income is wide, the advantage of the reduced rate shrinks until it disappears. This often happens in retail with stock to hold, in businesses with employees or freelance collaborators, and in those that pay a substantial commercial rent.
03 · Second case
Second case: you have tax deductions that the flat-rate scheme wipes out
Flat-rate income is taxed with a substitute tax and is left out of the IRPEF calculation. It looks like a technical detail, but it has a concrete consequence: personal tax deductions are subtracted from IRPEF, and if there is no IRPEF, there is nothing to subtract them from.
The items lost most often are mortgage interest on your main home, medical expenses, deductions for dependent family members where they still apply, and above all the annual instalments of building renovation bonuses. These last ones are the trickiest: an instalment not used in one year cannot be recovered in the years that follow.
An illustrative example. You have renovated your home and you still have eight annual instalments of €2,000 each. If you move to a pure flat-rate position, with no other income subject to IRPEF, those instalments are lost every year: over eight years, €16,000 of deductions that will not come back. The picture changes if you also have employment income or a pension, which keep generating IRPEF and therefore enough tax to absorb the deductions.
04 · Third case
Third case: business clients and investments with VAT
Under the flat-rate scheme you do not charge VAT to your clients and, at the same time, you cannot deduct the VAT you pay on purchases. If you work with private individuals this is a clear advantage: the final price is lower. If you work with businesses there is no advantage on the client side, because a business deducts the VAT it pays; all that remains is the disadvantage on purchases.
How much that disadvantage weighs depends on how much you buy. An example with round figures. You need to buy machinery for €50,000 plus VAT at 22%, which means €11,000 of tax. Under the ordinary regime that €11,000 comes back to you as a deduction; under the flat-rate scheme it becomes a permanent cost, and what is more a cost you cannot subtract from your income, because your income is set by the coefficient.
The same applies, on a smaller scale, if you have high recurring expenses subject to VAT: rentals, software, materials, vehicles. If almost all your clients are businesses and your purchases are substantial, the flat-rate scheme has to be tested with numbers, not with intuition.
05 · The method
How to run the numbers before you choose
The comparison takes four steps, based on a realistic estimate of the first year and of the year after.
Real costs
List the costs you will actually incur, with and without VAT, including rent, collaborators and planned investments.
Income under the two regimes
Calculate the income using the coefficient and your actual income. The gap between the two is the first indicator.
Deductions
Add up the personal tax deductions you are entitled to today and check whether you would have other IRPEF income to use them against.
Clients and VAT
Look at who pays your invoices: private individuals or businesses. Then estimate the VAT on purchases that you would lose.
Switching to the ordinary regime by election carries a minimum binding period, and leaving the scheme because you have exceeded the thresholds also follows precise rules: the choice should be made with the numbers in front of you. For the opposite method, that is when the flat-rate scheme is worthwhile, see the page on when the flat-rate scheme is worth it.
06 · Summary
Three questions to ask yourself before registering under the flat-rate scheme
First: are my real costs, as a percentage of revenue, higher than the ones the coefficient assumes? Second: do I have significant personal tax deductions, in particular instalments of building bonuses, and no other IRPEF income to use them against? Third: are my clients businesses, and do I need to make substantial purchases with VAT?
If you answer no to all three, the flat-rate scheme is very probably a sensible choice. If you answer yes to even one of them, it is worth comparing the two regimes on paper before you file the declaration to start your business activity. You will find the full picture of local costs, regional and municipal surtaxes and contributions in the guide to the flat-rate scheme in Turin.
Coefficients, rates and requirements should always be checked against the rules for the current year. The examples in this article are simplified and are only meant to show how the mechanism works.
Frequently asked
The questions that keep coming up
If I join the flat-rate scheme and it turns out not to be worth it, can I leave straight away?
You can elect the ordinary regime, but the election has a minimum duration and must be communicated in the prescribed way. That is why it is better to make the comparison before you register, not after the first year.
Does my spouse lose their deductions too?
No: the flat-rate scheme only concerns your own income. A spouse with income of their own keeps using the deductions they are entitled to. It can be useful to check which of you pays the deductible expenses, because the deduction belongs to whoever actually paid.
Is the flat-rate scheme worthwhile for professionals who work from home?
Often it is, because real costs are low and the coefficient assumes higher ones. You still need to check your personal tax deductions and the entry requirements, such as income from employment and your dealings with a former employer.
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