Owner-operator farmers
A dedicated scheme, with contributions based on working days and a notional income band.
VAT numbers · Agriculture
Farming and agritourism tax
Farming has a tax system all of its own: income is based on the cadastral values of the land instead of actual revenue, and VAT has a special scheme. These are favourable rules, but they only apply within a precise boundary.
01 · The status
Farming and agritourism: what counts as farming activity
A farm business owner is someone who carries on cultivation of land, forestry, livestock farming and related activities. This status opens access to the favourable regimes.
- The main activities are cultivation, forestry and raising animals.
- Related activities (handling, processing, marketing) are included if they concern products obtained mainly from your own farming.
- Also included is the supply of goods and services using mainly equipment normally employed on the farm.
- Agritourism is a related activity by law, with its own requirements.
- The IAP (imprenditore agricolo professionale, professional farm business owner) must meet time and income requirements and has access to further benefits.
- The coltivatore diretto (owner-operator farmer) has a social security position and benefits of their own.
The prevalence test holds everything together: related activities remain agricultural as long as they mainly use your own products. If you buy most of what you process or sell from others, you leave the agricultural boundary, with consequences for income tax and VAT.
02 · Taxation
How farming income is taxed
This is its most familiar feature: income is determined on a cadastral basis, from the land registry values of the land, not from the revenue actually earned.
- Landowner income (reddito dominicale) is attributed to whoever owns the land; agrarian income (reddito agrario) to whoever farms it.
- The values are revalued using the statutory coefficients.
- The advantage is greatest when actual profitability exceeds the cadastral value.
- In bad years, however, you still pay on a base that does not reflect the loss.
| Situation | How income is determined |
|---|---|
| Farming within the limits | Agrarian and landowner income on a cadastral basis |
| Livestock beyond the land limits | Business income for the excess part, on flat-rate criteria |
| Related processing activities | A dedicated flat-rate regime, with a coefficient applied to receipts |
| Agritourism | Its own flat-rate regime, with a coefficient applied to revenue |
| Farming companies | Possible option for cadastral determination, where the requirements are met |
| Activities outside the agricultural boundary | Ordinary business income |
03 · The special scheme
The agricultural VAT scheme
The special scheme lets you deduct VAT on a flat-rate basis, applying compensation percentages set for each product.
How it works
Ordinary VAT is charged on sales, but the deduction is made using the compensation percentages, regardless of the VAT actually paid on purchases.
When it pays off
When the compensation percentages exceed the VAT actually paid on purchases: this often happens on farms that buy in few inputs.
The exemption scheme
For producers below a turnover threshold, with minimal obligations.
The ordinary option
Always available, and it suits those making significant investments who want to deduct the actual VAT.
The choice to revisit
Special or ordinary depends on the year.
- With major investment in equipment, the ordinary scheme recovers more VAT
- In a steady year with few purchases, the special scheme is more advantageous
- The option is binding for a minimum period
- It should be assessed before investing, not afterwards
04 · Hospitality
How agritourism works
It is a related activity by law, but it requires authorisations and must keep its connection with the main farming activity.
- You need municipal authorisation and registration on the regional list of agritourism operators.
- Farming must remain the main activity compared with agritourism: the test is set by regional rules.
- The products served must come mainly from the farm or the local area, according to regional percentages.
- Income is determined under its own flat-rate regime, applying a coefficient to revenue.
- VAT follows a dedicated flat-rate scheme, with the option of the ordinary one.
- Related recreational and educational activities have their own rules.
The connection with farming is what distinguishes an agritourism business from a country hotel: if hospitality comes to outweigh farming, the classification changes and with it the tax regime, the authorisation and the obligations. It is the measure to monitor every year.
05 · Social security
Social security in farming
The sector has its own social security schemes, separate from those for artisans and traders.
IAP
The professional farm business owner has a position of their own and access to reduced contributions.
Farm workers
Agricultural employees have a specific contribution and insurance regime.
Benefits for young farmers
Contribution exemptions for young farmers setting up, with age and first-establishment requirements.
Disadvantaged areas
Reduced contributions for farms located in mountain or disadvantaged areas.
CISOA
The wage support scheme specific to farm workers.
06 · Support measures
Incentives and dedicated tools
The farming sector has a wide system of incentives, largely funded at European and regional level.
- Rural development funds finance investment, young farmers setting up and diversification.
- Tax credits for investment and innovation also apply to the sector.
- Benefits on buying land for owner-operator farmers and IAPs, with reduced taxes.
- IMU exemption (IMU is the municipal property tax) for farmland worked by owner-operator farmers and IAPs.
- Reduced excise duty on fuel for agricultural use, allocated on application.
- Subsidised insurance policies against adverse weather, with a public contribution towards the premium.
Almost all of these tools require an up-to-date farm dossier (fascicolo aziendale) and registration on the relevant lists. It is administrative work that has to be kept in order all year, because calls for applications have short windows and do not wait for those who still need to get their paperwork straight.
Frequently asked
The questions that keep coming up
Is farming income calculated on revenue?
As a rule, no: it is determined on a cadastral basis, applying the revalued landowner and agrarian income, regardless of how much the farm has actually taken in.
It is a favourable regime when actual profitability exceeds the cadastral value. In bad years, however, you still pay on a base that does not reflect the loss.
I sell my own produce directly. Do I remain agricultural?
Yes, marketing products obtained mainly from your own farming is a related activity and stays within the agricultural boundary.
The test is prevalence: if you buy most of what you sell from others, the activity becomes commercial, with business income and the ordinary VAT regime.
Is the special VAT scheme worth it?
It depends on your purchases. The special scheme deducts VAT using flat-rate compensation percentages: it pays off when these exceed the VAT actually paid on purchases.
Those making significant investments in equipment or buildings often do better by opting for the ordinary regime, which lets them deduct the actual VAT. The choice should be made before investing.
Can I open an agritourism business if I have little land?
The requirement is not size as such, but the connection: farming must remain the main activity compared with agritourism, according to the criteria set by regional rules.
The Regions set concrete parameters (working days, the ratio between revenues, where the products come from) that must be checked before starting, because they determine the authorisation itself.
Let's talk
The line between farming and commercial activity decides everything
Processing, direct sales, hospitality: each has a limit beyond which the regime changes. Let us check it together.