News · Business taxation · – October 2026

Flat-rate scheme and the EUR 85,000 and 100,000 thresholds: deferred or immediate exit

TOPIC
For flat-rate taxpayers close to the thresholds, amounts collected in 2026 decide 2027; above EUR 100,000 the scheme ends at once, with VAT from the collection that crosses the limit.

The rules are set out in art. 1, paragraphs 54 and 71, of Law 190/2014, as amended by art. 1, paragraph 54, of Law 197/2022 and in force on 23 October 2026; from 2027 the same rules are in art. 232, paragraph 1, and art. 238, paragraph 1, of Legislative Decree (d.lgs.) 117/2026, the new consolidated Income Tax Act. Paragraph 54, letter a), makes access to the regime forfetario (Italian flat-rate scheme) conditional on revenues earned or fees received, annualised, not exceeding EUR 85,000 in the previous year. Paragraph 71 provides for two separate exits: where one of the conditions of paragraph 54 is no longer met, the scheme ceases from the following year, whereas revenues or fees received in excess of EUR 100,000 cause it to cease in the same year, with VAT due from the transactions that cause the threshold to be exceeded. Three bands follow. A taxpayer closing 2026 within EUR 85,000 remains in the flat-rate scheme in 2027, subject to the other condition in paragraph 54, letter b), and the other grounds for exclusion in paragraph 57 (from 2027, art. 233 of d.lgs. 117/2026). A taxpayer between EUR 85,000 and 100,000 keeps the scheme for the whole of 2026 and applies the ordinary regime from 1 January 2027. A taxpayer exceeding EUR 100,000 leaves the scheme already in 2026. Italian Revenue Agency (Agenzia delle Entrate) Circular No 32/E of 5 December 2023 clarified that the EUR 100,000 limit, unlike the EUR 85,000 one, is not annualised for those who started their activity during the year.

According to Circular No 32/E/2023 the relevant moment is collection. For those already in the scheme, remaining in it in 2027 depends on the amounts collected in 2026, including for transactions of previous years, while invoices issued and not collected by 31 December do not count. The same criterion applies to the EUR 100,000 limit: if the invoice that exceeds it is issued upon collection, it shows VAT on the entire consideration, without splitting off the excess portion; if collection follows the invoice, the invoice must be supplemented with VAT. Transactions carried out and not yet invoiced at the date of that collection also move to the ordinary regime, while those invoiced earlier remain under the flat-rate scheme even if collected later. In the year in which EUR 100,000 is exceeded, income is determined under the ordinary rules of the TUIR (Consolidated Income Tax Act) and the adjustment of the input VAT deduction is made in the return for that same year; on exit for exceeding EUR 85,000 the adjustment is made in the return for the first year under the ordinary regime. A taxpayer who left the scheme because of the EUR 100,000 limit may return to it from the second following year, if in the first their revenues or fees stay within EUR 85,000 and the other requirements are met. In our view, deferring collections to January is defensible only if it reflects actual and documented payment terms.

IN PRACTICE
By November the adviser reconstructs, for each flat-rate client, the amounts actually collected in 2026 and those expected by 31 December, distinguishing invoices already issued from those still to be issued. On exceeding EUR 100,000 the taxpayer supplements the e-invoice with VAT, where it was issued before collection, through an upward adjustment note (nota di variazione in aumento) sent via the Exchange System (SdI); from that collection onwards the taxpayer keeps the VAT registers and the accounting records of the applicable accounting regime and, by the deadline for the annual return, records the transactions and purchases made since the start of the year. According to Circular No 32/E/2023, clients acting as withholding agents must apply withholding tax already to the payment that causes the threshold to be exceeded and to all fees paid afterwards, even if invoiced earlier: they should be told at once that the flat-rate scheme declaration no longer applies. The schedule of collections should be kept together with the bank statements as the basis for the threshold check, and documentation should be prepared of the goods and services not yet sold or used on which the VAT adjustment is calculated.

Summary note by the CommercialistiAvvocati network, based on specialised legal and practice sources. The text does not reproduce original contributions and does not constitute professional advice.

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