Nobody in Brussels can abolish the forfettario

Every June, Italian freelancers are told that the flat-rate regime they work under is about to be taken away, and that Europe is the one taking it. The claim circulates as fact: la Commissione europea chiede all’Italia di eliminare il regime forfettario.

Two things are worth knowing. The Commission asked for something else. And no instrument exists through which the European Union could impose this on Italy even if it wanted to.

A recommendation is not a rule

The document behind this June’s coverage is a Council Recommendation, adopted on 3 June 2026 alongside the Commission’s annual Country Report for Italy.2 Its legal weight is settled in one line of the Treaty on the Functioning of the European Union:

“Recommendations and opinions shall have no binding force.”Article 288 TFEU1

That is not a point about tone. It is the whole category: the European Semester runs on recommendations, and a recommendation cannot compel a member state to change a tax. Italy can read it, note it, and legislate as it likes. No fine follows, no infringement action, no court case — those instruments exist in EU law, and this is not one of them.

Italy holds its own veto

The obvious follow-up is whether the EU could legislate instead. On direct taxation — income tax, which is what the forfettario is — the Treaty offers no route around a member state. Approximating national law here happens by directive, with the Council acting unanimously.3

Unanimity means all 27 governments. For the regime to be legislated away, the Italian government would have to vote to legislate away its own flat tax, in a Council where it holds a veto it would have every domestic reason to use. There is no version of this in which Brussels overrules Rome on the forfettario.

This asymmetry is deliberate rather than accidental. VAT and other indirect taxes were harmonised because they distort the single market directly; income tax was left to member states. It is why Ireland keeps a 12.5% corporate rate, why Bulgaria keeps a 10% flat income tax, and why Italy keeps this.

What was actually asked for

Set the legal question aside and the factual one still does not go the way the coverage suggests. The recommendation’s fiscal paragraph is specific about its targets:

“…including by further fighting tax evasion and reducing remaining tax expenditures, including those related to value added tax and environmentally harmful subsidies. Update cadastral values…”COM(2026) 212 final, recommendation 12

Evasion, VAT reliefs, fuel subsidies, the property cadastre. The criticism of “special regimes for self-employed” is real, and it sits in the recitals — the part that explains the reasoning, not the part that sets the ask. The institution that did say eliminate was the IMF, eight days earlier, closing its Article IV mission: eliminating the preferential flat-tax rate on self-employment income “would expand the tax base, improve equity, and support consolidation efforts”.4 The IMF has no power over Italian tax law either. It publishes advice, and Italy has been declining this particular piece of it since 2019.

There is a quieter signal in how the Commission writes about the regime at all. We counted a fixed list of tax terms across the 2024, 2025 and 2026 Country Reports — 199,509 words — and the regime is described without ever being named.56

The name never appears, in any of the three years. Nor does presumptive, the standard English term for regimes of this kind — and unlike the Italian name, no translation convention explains that away. What the 2026 report does contain is an accurate description: “most self-employed people have been subject to flat-tax regime, which was extended in 2023 to include those with revenues below EUR 85 000”. The regime is a characteristic of the Italian economy in these documents, not a named object of policy — which is roughly the distance between being criticised and being targeted.

What would actually change it

One parliament can end the forfettario, and it is the one that created it: Italy’s, in a budget law, the same instrument that introduced the regime in 2014 and raised its ceiling to €85,000 in 2023.7 That is where the risk lives, and the direction of travel over the last decade has been to widen the regime rather than narrow it.

This is not a forecast. An Italian government under fiscal pressure could tighten the threshold, trim the coefficients or means-test eligibility in any autumn, and it would not need Brussels’ permission or opposition to do it. The point is narrower: if you want to know whether the regime survives next year, the document to read is the Italian budget, not the European Semester.

Where the EU does have leverage

None of this makes the Semester decorative, and it would be a poor piece that traded one overstatement for another. Two EU instruments do bind Italy. Under the excessive-deficit procedure the Council sets a corrective path Italy has to meet — but it binds aggregate net expenditure, not which taxes deliver it, so it can force Italy to find revenue without specifying where. Recovery and Resilience Facility payments hang on milestones Italy itself wrote; a milestone touching the flat tax would be real leverage, and none of Italy’s do.

Political pressure counts as well, and it is the mechanism people are actually sensing. Repeated criticism from the Commission, the IMF and the OECD shapes what an Italian government thinks it can defend in a budget negotiation. That is a real force. It is not a legal one, and the difference matters when you are deciding whether to plan around a regime.

Whether the criticism has merit is a separate question with a real answer — the threshold does change what people invoice, and we put a price on crossing it in the €85,000 cliff.

Method: treaty text quoted from the consolidated TFEU on EUR-Lex. Term counts taken from the English editions of each Country Report with pdftotext in reading order — not layout mode, which preserves these reports’ two columns and interleaves them, breaking any rule that depends on words being adjacent — plus the Italian 2025 edition as a translation check. Terms are case-insensitive regular expressions fixed before the 2026 text was opened; “flat” counts only where “tax” or “income” follows within 40 characters in the same sentence, and every hit was checked by hand.