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Flat rate scheme: no 5% flat tax for activities previously performed abroad

How the flat tax scheme is applied to those who continue an activity previously performed abroad (Resolution n. 197/2022)

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Those who carry out activities in Italy, which were previously performed abroad, may not apply the 5% flat tax rate: however, they are still eligible for the 15% special flat tax rate.

Resolution n. 197/2022 clarifies the most frequent case for those who transfer their residency to Italy and continue their self-employment activity. These are often entrepreneurs and freelancers wishing to apply the flat tax scheme in Italy to carry out activities previously performed abroad.

The case presented by the taxpayer

The taxpayer in question resides abroad and has been carrying out his freelance activity (as a designer), with a foreign VAT registration. Now, he wishes to move to Italy and continue to perform the same activity for the same clients. Thus, he intends to open a Partita Iva in Italy and apply the flat rate scheme.

The question raised by the taxpayer concerns the possibility to benefit from the 5% flat tax rate.

Law n. 190/2014, in Section 1, Paragraph 65, provides that such flat tax rate is only applicable to those who undertake a new activity. The taxpayer claims that the novelty requirement would be met in his case, since the above-mentioned Paragraph 65 makes an implicit reference to activities previously performed with an Italian VAT registration (Partita Iva).

Therefore, the requirement will be met in his case, given that the taxpayer will perform his activity with an Italian Partita Iva for the first time.

The Italian Revenue Agency’s Resolution n. 197/2022

Firstly, the Agency emphasises the possibility to apply the flat rate scheme for those who transfer their residency to Italy and appear as fiscally resident in the country.

Moreover, the Agency reaffirms that even those who are fiscally resident abroad may apply the flat tax scheme, but only if:

  • they reside in a Member State of the European Union or in a Member State of the European Economic Area Agreement, which guarantees an adequate exchange of information, and
  • they produce incomes in the Italian territory, accounting for at least the 75% of the overall income produced.

The taxpayer’s State does not fall within the EU or the EEA Member States. Thus, the Agency underlines that the taxpayer will only be able to apply the flat tax scheme starting from the year in which he will trasfer his residency to Italy, in sufficient time to be considered fiscally resident, starting from that year.

In relation to the question posed by the taxpayer, the Agency makes reference to the provisions stated in Law n. 190/2014, Sect. 1, Par. 65:

For the purpose of encouraging the start up of new activities, the applicable tax rate is reduced to 5% for the first accounting period and for the following four, provided that, among other conditions:

“the taxpayer has not carried out, during the 3 years prior to the start up of the activity […], any artistic, professional or business activity, also in an associated form or in the form of a family holding (lett. A)”

“the activity to be carried out does not constitute, in any way, a mere continuation of another activity, previously perfomed under self-employment or employment, except in the case in which the activity previously carried out consists in the mandatory period of practice for the exercise of arts and professions (lett. B)”

The resolution provided by the Italian Revenue Agency is therefore negative and against the case submitted by the taxpayer.

  • In fact, he may apply  the 15% flat tax regime, as provided in Law n. 190/2014, Sect. 1, Par. 64;
  • He may not benefit from the 5% flat tax rate, provided for in Par. 65.

This is due to the fact that the activity to be carried out in Italy does not meet the novelty requirement, since it has already been perfomed abroad and addressed to the same clients.


The novelty requirement is applied to evaluate the applicability of the favorable 5% tax rate, taking into account all activities previously performed, even if carried out with a VAT registration or in another form abroad.

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Regulatory Framework

Law 190/2014, Sect. 1, Paragraphs 64-65

Reference (Italian only)

Resolution n. 197/2022

Reference (Italian only)

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