Well, the original title was Everything you need to know – I quickly realized my understanding of this topic is limited. I want to share with you all I know so at least you can get an idea of the options available! If you have moved to Italy and are hoping to open a small business or work freelance, you will need a Partita IVA. This is your VAT code as some may know it. The first thing to know about these Partita IVA’s is that it is a very complicated regime, and you will absolutely need to get a commercialista. Trust me it will make your life much easier.
So what are the benefits of getting a Partita IVA?
Well if you have been living in Italy for some time and have not been able to obtain a Permesso di Soggiorno for work, you may be looking to the Freelance route. By opening a Partita IVA you can obtain the Permesso di Soggiorno for “Lavoro Autonomo” or freelance.
Also if you are planning on running any business while being a resident in Italy, you will need it to legally run your business.
There are different types of Partita IVA, and some allow you to claim purchases to deduct from taxes or purchase certain deals at various electronic stores and others. Though this seems to be nowhere near the level of deduction the US allows for.
What type of Partita IVA do I need?
There are many different types of Partita IVA, my own personal experience has been with the Forfettario but here I will try to give you an overview of the different options.
The forfettario PIVA is reserved for individuals who make less than 30,000euro a year. Under this PIVA you have about 14% taxes TOTAL to pay. This is broken down into 3 separate taxes: 5%+ 5%+4%. Now, being under 35, and a foreigner there have also been some legal changes that allow me low taxes until a certain age. Not being a financial advisor I can’t say precisely what the differences are, this is something you will need to ask your commercialista.
Under the Forfettario you also have limits in paying employees or collaborators, so it is better to adapt for individuals. This is usually used for Consultants, Social Media Managers, small gig type work.
Instead, the other Partita IVA is a Regime Contributivo. Under this PIVA, the general taxes you pay will be higher, towards 24%-34%. Usually, this is the PIVA required for architects, doctors, psychologists, and other professionals. For example, I spoke with one individual working in Tourism who told me it was 30% tax and NO write-offs.
Then if you are opening a commercial endeavor, a store, or bar, you will then have to have a different setup, and it is a much longer process. Again, ask your commercialista they will set you up right.
So how do I set up a Partita IVA?
You can try to set it up on your own, or again, just go to your commercialista. If you set it up on your own it will be free, through a commercialista prepare to pay about 50euro for the process.
To open a Partita IVA you must head on over to the Agenzie delle Entrate to request it, the will provide you a form to fill out, asking about the type of work. The forms are AA9/12 o AA7/10, and you will be asked for an ATECO code to identify what you will work as.
Afterward, you will also have to register at INPS, the most dreaded thing in Italy, yes worse than the Questura. You basically need to head to the office of INPS, get the first have of a password, then register online, then they also send you a part in the mail. But step one, just go to INPS with a copy of your ID, Passport, Permesso di Soggiorno, and they will walk you through it.
If you haven’t at this point GET A COMMERCIALISTA.
Ok, ok a commercialista, tell me what I have to do?
Easy, you will find plenty in every city, choose whoever you would like, obviously English speaking is a plus. A commercialista on average (from a survey of all my fellow PIVA’s) costs about 400-500euro per year, and that can be broken down into quarterly or bi-annual payments. This is the absolute best investment you will make, and just DO IT.
Seriously, don’t try to figure this out on your own, a commercialista will keep things simple, fill out all your taxes, set you up right, and even keep track of bonuses you may be up for. For example, during the pandemic, my commercialista frequently sends me updates about various government bonuses I qualify for and how I can obtain them.
Note for Americans: Social Security and INPS
If you are working both US and Italy jobs, or you choose to send your money into Social Security, rather than INPS, you can do this and pay only one country’s taxes rather than both. Find out more here.
However, keep in mind, if you are on the forfettario PIVA, your INPS tax is only 4% and your Social Security will be much higher. It is up to you to decide where you would like your pension holdings to go.
If you are considering starting a business
I want to send you over to this great resource I found, which comes directly from a legal office. I hope this will help answer some of your business questions!
What if I want a Freelance Visa?
So the Freelance Visa in Italy is a bit different. An Italian Self-Employment visa is a D-Visa, a long stay one. However, this visa simply gives you permission to ENTER the country, not to work or live. That is right though this allows you to start your journey in Italy, you will need further authorization to stay there.
This means before you even get ready to apply for the visa, you need to already have the partita IVA and other authorizations, meaning you need someone in Italy to figure it out for you. There are usually only 2.400 of these visas available per year, and it is very much first come first serve.
So here are the different versions of those Freelance Visas.
The Startup Visa: to foreigners who want to open an innovative company in Italy, or who join an already existing startup as an executive.
Freelancer Visa: to individuals who want to start with freelance work and don’t have a company to hire them
Entrepreneur Visa: if you have an investment plan of over 500,000euro to implement that will benefit the Italian economy, this one is for you!
Before you get to the Visa, this is the whole process you will need:
- Apply for a Nulla Osta from the Immigration Desk (Sportello Unico Immigrazione – SUI). This has to be done in Italy, with proper documentation as to your status and ID.
- Get the authorization and documentation needed for self-employed activity in Italy. (Partita IVA & such)
- Apply for the Self-Employment Visa at the Italian Consulate in your home country.
- Enter Italy and apply for an Italian residence permit (permesso di soggiorno) for lavoro autonomo.
For more information on all the documentation you will need to apply for the Visa, visit Visa Guide, they are an excellent resource with all the details!