Those who transition from the ordinary regime to the flat rate regime cannot access the reduced rate of 5%.reserved exclusively for those starting a new business without continuity ties to previous work experience.
This is a summary of the Revenue Agency’s response to the question of a taxpayer who moved from employed to self-employed. Let’s understand better the reason for this exclusion from the application of the reduced rate.
Flat rate regime: conditions for the preferential rate
THE’5% substitute tax it is normally applicable in the first year of activity and in the following four, but only if:
- the new business it does not constitute the continuation of an activity previously carried out as an employee or self-employed person;
- it is not a simple formal change (for example, variation of the Ateco code) aimed at simulating a new activity.
The only one exception admitted is represented by compulsory practice for the exercise of arts or professions.
This principle is reiterated by the Revenue Agency in response no. 226 of 22 November 2024, which – in line with circular no. 10/E of 2016 – highlights how these constraints were introduced with anti-avoidance purposes. The aim is therefore to prevent already active subjects from obtaining the benefit by simulating a “renewal” of the activity.
From ordinary to flat rate: the specific case
The Agency’s clarification starts from the question of a taxpayer who, in the same fiscal year, passed from employed to self-employed. According to the regulations, could not access the flat-rate scheme in the initial year as it exceeded the employee income threshold established by the scheme. Now with a question he asked if, al transition to flat rate in the second yearcould benefit from the reduced rate of 5%.
The Agency has excluded this possibility, underlining that the reduced rate is reserved exclusively for those who apply the flat-rate regime from the first year of activity, satisfying all the required conditions.
Business continuity
To evaluate whether you are in the presence of “mere continuation” of an activity previously carried out as an employee or self-employed, it is essential to consider:
- whether the new business targets the same clientele;
- if the new business uses the same skills as the previous job.
In this specific case, the taxpayerand continued to carry out the same activity started under the ordinary regimetherefore the requirements to benefit from the reduced rate do not exist.
Therefore, anyone who starts a business under the ordinary regime (for example, due to the presence of causes impeding the flat rate) and subsequently enters the flat rate regime while maintaining the same activity, cannot access the preferential rate of 5%: the intent of the legislator is to reserve this benefit for those who actually start a new business and adhere to the flat rate regime from the beginning. In fact, the Revenue Agency clarifies that the absence of the “novelty” requirement automatically excludes the application of the benefitwithout the need for further evaluations.
