Flat-rate VAT number: the sting has arrived. The costs to open, maintain and close in 2023
The sting on flat rates has arrived and many are closing because it is not convenient. Let's see the real numbers and what changes.
ilovetreding – By Salvatore Dimaggio –
In 2023, there are no opening and closing costs for the flat-rate VAT number, but they are there taxes, social security contributions and costs of financial advisor. The VAT number with the flat-rate scheme also in 2023 is one of the most interesting possibilities from the point of view tax but there are limits. To join the flat-rate scheme this year, natural persons who carry out a business activity or self-employment must have earned wages or revenues of less than 65,000 euros (editor's note: raised to 85,000 )
What you need to know and what changes
Be careful though, because the verification of the sales is done keeping in mind the year previous to the reference one. So year by year you have to go and check that you always stayed inside of these 65 thousand euros. But if the entry requirements refer to the previous year, the exclusion requirements are for the current year. This is a concept that often confuses many people.
Taxpayers who have the flat-rate regime must pay contributions according to the code ATECO which is attributed to them (editor's note: for ISF 74.90.99). A tax is levied on taxable income substitute to that on income and then there are also the regional surcharges and municipal and Irap to 15%. An advantage is that flat-rate VAT numbers are not subject Withholding Tax and are exempt from VAT obligations.
Per calcolare il reddito imponibile nel regime forfettario, si applica all’ammontare dei ricavi un profitability coefficient (78% for ISF), available inattachment no. 2, to the 2019 budget law and which diversifies a seconda del codice ATECO relativo all’attività esercitata. Successivamente si applica al reddito imponibile così calcolato l’aliquota del 15% or of 5% for the first five years of operation if the taxpayer start a new business or profession. (ed)
Heavy and often inconvenient expenses
But a major expense for those who have a flat-rate VAT number is that of financial advisor, with a cost that varies between six hundred and €1,000 per year. It is a sort of hidden fee that whoever opens the 
It is much better to agree with the first financial advisor on how it will be applied and how the amount to be paid will be calculated and whether it will have to be paid monthly or at the end of the year. But the truth is that people with VAT numbers have been protesting for some time because they are forced to live in a limbo. In many cases it is simply a matter of employees forced to have all the formalities of a professional and in many other cases they are workers who actually earn very little.
A limbo without help
Many experts argue that the VAT number conceptually makes sense for the real ones professionals who have significant incomes. But below a certain income threshold it means only a jungle of fulfillments and of costs that weigh on a fragile subject that should instead be supported both from an economic point of view than from the bureaucratic one.
Related news: VAT numbers. The flat-rate scheme: access, passage and exit
VAT number Flat-rate scheme at 85,000 euros. Employees: "Production Bonus" detaxed
Guide to the flat rate scheme 2023
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Who is the flat-rate scheme suitable for?
Electronic invoice – 8 March 2023 by Stefano Melli
Finding a clear, simple, unarticulated answer means finding a lie. Before framing the profiles to which the flat-rate regime really suits, let's give a very brief definition.
The flat-rate regime provides for a substitute tax, which relieves professionals of all the taxes of the ordinary regime, equal to 15% and includes IRPEF contributions, IRAP and other acronyms that we don't like. Under certain conditions this tax can drop to 5% for the first 5 years and as long as you remain in this regime you are exempt from paying VAT. That said, it's good for everyone, right?
Let us consider other determinants of this regime:
- Labor-related costs cannot be deducted from taxes
- It is not possible to deduct personal costs from taxes (medical expenses, renovations, mortgages…)
- It is not possible to invoice more than 85 thousand euros (2023 Budget Law)
- It is not possible to have expenses related to collaborators greater than 20 thousand euros.
In essence, if it is true that the burden of taxes is reduced to a minimum, it is also true that constraints are not lacking. By definition, in fact, the flat-rate regime is dedicated to small economic activities and - for this reason - provides for simplifications at the accounting and VAT level.
For this reason, entry into this regime is also subject to restrictions.
How to re-enter the flat rate scheme
To access these discounts you must:
- not having had another VAT number in the previous three years;
- the new activity must not be the continuation of a previous one;
- not having exercised the same activity as an employee or self-employed;
- not continue the activity of another entity, which exceeded 65,000 euros in revenues during the previous year.
These limits serve to comply with the definition previously given in relation to small economic activities.
Even the costs of opening the flat-rate VAT number are reduced to a minimum, they do not exceed 100 euros except in special cases where it is also necessary to register with the chamber of commerce ... plus the accountant! Because it is true that it is possible to take all the steps yourself, or by relying on online services, but our dispassionate advice is to always be accompanied by a professional in the sector, preferably with experience.
Ever heard the saying that to enjoy a motorcycle without hurting yourself you have to be afraid of it? Here, it is more or less the same when it comes to the VAT number: to fully enjoy it, it is certainly better to delegate the more technical issues to those who have had such a training course that they know how to navigate the Italian tax complex.
So, who benefits from the flat-rate scheme?
Ok, we tried to go around it but it's time to respond.
DEPENDS
Don't be offended, but it's true: it depends on the type of business, the personal situation at the time of opening the tax position, the costs that will be faced and the degree of autonomy of the professional.
In fact, it is always good to remember that even if the taxation is applied only to a part of the turnover (ranging from 78% to 40%), it is also true that the forecast of costs does not always reflect reality. The rental cost of a hairdresser, for example, is not expected for a designer. Therefore these two categories will have a different taxable percentage with respect to the turnover. But what if the designer had an office? The risk is that of having excess expenses that cannot be deducted from taxes.
Therefore, before choosing the very comfortable flat-rate scheme, it is good practice to estimate the expenses that will be incurred during the year, also considering any collaborators.
Ultimately it is good to remember that having a percentage close to zero with respect to the IRPEF payment, the costs related to the person will not be deductible. Medical expenses and expenses related to the house, therefore, will only be present among the outgoing items of your financial balance. The attention then in this case goes to those who have children in anticipation, or the purchase of a property.
If, on the other hand, as is increasingly the case, the VAT number is among the first jobs of one's professional life, then the flat-rate scheme could be an excellent way to live one's VAT number peacefully.
Now let's really hope that "it depends" is not seen as a way of not answering, but the best possible answer. The key to interpreting it is to carefully analyze the constraints and possibilities of the flat-rate regime and understand whether these can meet the needs of the future professional concerned.