Billing €50,000 in Italy from abroad? You may earn €13,000 at home

A translator lives in Lisbon, holds an Italian partita IVA and bills €50,000 a year to clients in Milan. Italy’s flat tax is open to them, and while it stays open they keep €35,508 of that €50,000. It stays open only while at least three quarters of everything they earn, anywhere, arises in Italy — so they may take on €13,000 of work from Portuguese clients and no more. The euro after that ends the regime for the year and costs them €8,311 on Italian work that has not changed at all.19

The door, and the condition on it

Comma 57 of article 1 of L. 190/2014 lists who cannot use the regime forfetario. Lettera b) begins by shutting it to non-residents outright, then re-opens it for one group: people resident in an EU member state, or in a European Economic Area state that exchanges tax information, who “producono nel territorio dello Stato italiano redditi che costituiscono almeno il 75 per cento del reddito complessivamente prodotto” — who produce in Italy at least 75% of their total income. The instructions to the 2026 return repeat the sentence word for word.14

Every other condition on the regime is a test on the Italian business: what it collects, what it spends on equipment, who its clients are, whether the person also has a job. This one is a test on everything the person earns outside it. It is the only condition in comma 57 that a freelancer can fail by having a good year somewhere else.

Seventy-five per cent is a third

A share of a total is an awkward thing to plan against, because the total moves whenever either part of it does. Writing I for the income arising in Italy and F for everything earned elsewhere, the condition is I ≥ 0.75 × (I + F), and that rearranges to F ≤ I / 3. The percentage in the statute is a ratio between the two halves: a person may earn abroad at most a third of what they earn in Italy.

That form is worth having because it is the one a reader can use. Three euros of Italian income buy room for one euro from anywhere else. At €50,000 of Italian billing on the professional coefficient the Italian income the statute measures is €39,000, so the room is €13,000 — and a Portuguese client paying €13,000.01 takes the share to 74.9999% and the regime with it.9

What the next euro costs

Failing lettera b) does not change a single thing about the Italian work. The same clients pay the same fees for the same hours; the person simply files under the ordinary rules instead, where progressive income tax and the surcharges apply to the whole of the income and the contribution is charged on all of it rather than on the coefficient share. At €50,000 on the professional band that is €35,508 against €27,197: €8,311 for the year.39

The size of the drop is the ordinary cost of losing the regime, which the piece on the ex-employer bar already sets out across the same grid; at the €85,000 ceiling it reaches the €18,145 measured in the piece on that threshold. What is different here is the trigger. Both of those are things the freelancer does in Italy. This one is a fee from a client in the country they live in.

The two columns move against each other, which is the uncomfortable part. A lower coefficient means the statute credits the business with less Italian income, so the allowance shrinks; it also means more of the turnover escapes tax under the flat regime, so losing the regime costs more. A retailer on the 40% band has the least room to earn at home and the most to lose by using it up.

Which income the ratio counts

Lettera b) counts redditi — income — on both sides of the ratio. Under the flat regime the income of the Italian business is not what it invoices but the coefficient applied to it, so a like-for-like reading puts €39,000 on the Italian side of our translator’s sum and gives the €13,000 above. Read the ratio on gross receipts instead and the same person has €16,666.67 of room. Neither the statute nor the 2026 return instructions say which is meant: the instructions reproduce the condition and add nothing about how to compute it.14

Both columns are in the published data and the dashed line on the first chart is the wider reading, because a reader planning against this needs to know the answer is not settled. The tighter of the two is the one that follows from the word the statute actually uses.

One thing the provision does not do is scale itself to a part-year. Comma 54, which sets the €85,000 entry ceiling, says receipts are “ragguagliati ad anno” for a business that traded for part of the year. Comma 57 contains no such words anywhere. A freelancer who registers in October is measured on a ratio of three months of Italian income against a full year of income at home.21

Why Italy taxes any of it

The rule only matters for someone Italy taxes in the first place, and article 23 of the income tax code is what puts them there. For a non-resident it treats as arising in Italy “i redditi di lavoro autonomo derivanti da attività esercitate nel territorio dello Stato” — self-employment income from activity carried on in Italy. The very next paragraph, for business income, requires a stabile organizzazione, a permanent establishment. Self-employment carries no such requirement in Italian domestic law: the activity being carried on in Italy is the whole of the test.5

The same three quarters turn up once more, a few lines later. Article 24 taxes non-residents with most reliefs withdrawn, then adds comma 3-bis: a non-resident whose Italian income is “almeno il 75 per cento” of their total is assessed under the articles that apply to residents instead. So the same fraction decides two separate things for the same person — whether the flat tax is available, and whether the ordinary alternative is the resident version of it or the stripped one. Crossing the line moves both.6

What this does not settle

The figures here are the Italian bill and nothing else. What the country of residence does with the same income, and what the double-tax treaty between the two states says about who may tax it, are outside this and would change the number a real person ends up with. A treaty can relieve income that article 23 brings into charge; none of that is modelled.

Contributions are charged here at the Italian Gestione Separata rate on both sides of the comparison, which is what the engine behind the public calculators does. Whether a cross-border freelancer belongs in the Italian scheme at all is decided elsewhere and by a different test: article 13 of Regulation 883/2004 puts a self-employed person working in two or more member states under the law of the state of residence if a substantial part of the activity is there, and otherwise under the law of the state where the centre of interest of the activity lies. Nothing in comma 57 moves that, and someone can sit inside the Italian flat tax while contributing at home.78

The surcharges are at the 2.23% national average rather than a real address, which for the ordinary side is worth up to the spread published in the piece on comune surcharges. Real business costs are assumed to be zero; where they are large the ordinary rules were the better place to be anyway, and the break-even piece says where that turns. Nor is there anything here about how many people the rule touches: no breakdown of who holds an Italian partita IVA from another member state is published, so this says what the rule does and not how often it does it.