Italy has become an increasingly attractive base for freelancers, remote workers, and self-employed professionals, particularly Americans who can combine Italian citizenship by descent with location-independent income. However, working independently in Italy requires navigating a tax and regulatory system that differs substantially from the American approach. This guide covers what you need to know.
The Partita IVA
The partita IVA is Italy’s VAT (Value Added Tax) registration number, and it is the fundamental requirement for anyone working as a freelancer or self-employed professional in Italy. If you earn income from independent work while resident in Italy, you need a partita IVA. There is no Italian equivalent of the American practice of freelancing casually with just a Social Security number and a 1099 form.
Opening a partita IVA is free and can be done at the Agenzia delle Entrate (Revenue Agency) office or through a commercialista (accountant/tax advisor). The process requires your codice fiscale, identity document, and a declaration of your business activity using the ATECO code system (Italy’s standardized classification of economic activities). Your ATECO code determines which category your work falls into and affects your tax treatment.
Regime Forfettario (Flat-Rate Scheme)
The regime forfettario is Italy’s simplified tax regime for small businesses and freelancers, and it is remarkably favorable. It is available to individuals with annual revenues up to EUR 85,000 (as of 2025) who meet certain other conditions (not employed full-time by a single client who was a previous employer, no participation in partnerships, etc.).
Under the regime forfettario, your taxable income is calculated by applying a fixed profitability coefficient to your revenue, based on your ATECO code. For example, if you are a consultant (typical coefficient: 78%), and you earn EUR 50,000 in revenue, your taxable income is calculated as EUR 39,000 (78% of EUR 50,000). Some activities have lower coefficients (as low as 40%), meaning a larger portion of your revenue is considered non-taxable expenses.
The tax rate on this taxable income is a flat 15%, or just 5% for the first five years if you are starting a new activity and meet certain conditions (no similar activity in the previous three years). This 5% startup rate makes Italy one of the most tax-friendly environments in Europe for new freelancers.
Additional benefits of the regime forfettario include no VAT charged on invoices (your clients pay the net amount, simplifying pricing and administration), simplified accounting (no requirement for double-entry bookkeeping), and no IRAP (regional business tax).
The main obligation beyond income tax is INPS (social security) contributions. For most freelancers registered under the Gestione Separata INPS scheme, contributions are approximately 26% of taxable income. This is a significant cost but provides access to Italian pension benefits, sick pay, maternity/paternity leave, and other social protections.
Ordinary Tax Regime
If your revenue exceeds EUR 85,000 or you do not qualify for the regime forfettario, you fall under the ordinary tax regime (regime ordinario). This involves progressive income tax rates (IRPEF) ranging from 23% to 43%, plus regional and municipal surcharges, IRAP (regional business tax of approximately 3.9%), VAT obligations (charging 22% VAT on invoices and filing periodic VAT returns), and full accounting requirements. The ordinary regime is more complex and typically requires more involvement from a commercialista.
Remote Work for a US Employer
If you are employed by a US company and working remotely from Italy, the situation is more complex. Simply working from Italy on a US payroll does not make your tax situation simpler; in fact, it creates complications in both countries.
As an Italian tax resident (anyone spending more than 183 days per year in Italy or having their primary domicile or habitual abode in Italy), you are subject to Italian tax on your worldwide income. This includes your US salary. The US-Italy Tax Treaty prevents double taxation, but you must file taxes in both countries and claim credits appropriately.
Some remote workers for US companies establish themselves as Italian freelancers (partita IVA), invoice their US company for services, and operate under the regime forfettario. This is a clean structure if your US company agrees to convert your relationship from employee to contractor. However, this conversion has implications for both parties and should be structured carefully with professional advice.
The Digital Nomad Visa provides a specific legal framework for non-EU remote workers, but Italian citizens (including those recognized through descent) do not need this visa and can simply establish tax residency and work arrangements directly.
US-Italy Tax Obligations
American citizens and green card holders are required to file US tax returns regardless of where they live. As a US person living and working in Italy, you will file both Italian and US tax returns. Key provisions that prevent double taxation include the Foreign Earned Income Exclusion (FEIE), which allows you to exclude up to approximately USD 130,000 of foreign earned income from US tax (2025 figure, adjusted annually). The Foreign Tax Credit (FTC) allows you to credit Italian taxes paid against your US tax liability. And the US-Italy Tax Treaty provides specific rules for various income types and residency-based tiebreakers.
FBAR (Foreign Bank Account Report) and FATCA reporting requirements apply if you have Italian bank accounts exceeding specified thresholds. These are filing obligations, not additional taxes, but failure to file carries severe penalties.
Working with a commercialista who understands international tax and ideally a US tax professional familiar with expat taxation is strongly recommended. The intersection of US and Italian tax law is complex enough that professional guidance typically saves more than it costs.
The Commercialista
A commercialista is Italy’s equivalent of a CPA, but with a broader role. They handle tax filing, accounting, business registration, regulatory compliance, and general financial advisory. Nearly every Italian freelancer and small business works with a commercialista. Annual fees range from EUR 500 to 2,000+ depending on the complexity of your situation.
Finding a good commercialista is important. Ask for recommendations from other freelancers or expats, verify they are registered with the Ordine dei Dottori Commercialisti, and ideally find one with experience handling international clients or US-Italy tax situations.
Practical Considerations
Invoicing: Under the regime forfettario, you issue invoices without VAT, noting your regime forfettario status. Electronic invoicing (fatturazione elettronica) through the Sistema di Interscambio (SDI) is required for most B2B transactions in Italy, though forfettario taxpayers invoicing foreign clients may have simplified requirements.
Banking: Open an Italian business bank account or use your personal account (many forfettario freelancers use personal accounts). Italian banks are accustomed to freelancer accounts and offer appropriate services.
Coworking: Coworking spaces have proliferated in Italian cities, with strong scenes in Milan, Rome, Florence, Turin, Bologna, and Naples. Monthly memberships typically range from EUR 150 to 350 for a dedicated desk.
PortaleItaly helps Americans establish their professional life in Italy, from citizenship recognition to understanding your tax and business options. Contact us to plan your move.