Tax Observatory › Assessment, collection and litigation › Italian flat-rate taxpayers: the tax authorities once again have five years, as the reduction in the assessment period is abolished

Italian flat-rate taxpayers: the tax authorities once again have five years, as the reduction in the assessment period is abolished

Article 21 of Legislative Decree No 148 of 7 August 2026 removes, from the 2026 tax year, the one-year reduction in the assessment period that the law granted to taxpayers under the flat-rate scheme (regime forfettario) whose turnover consisted entirely of electronic invoices. For 2026 income declared in 2027, the notice of assessment may be served until 31 December 2032. For the years up to 2025 the reduction remains, but only for those who met the requirement and can prove it.

From the 2026 tax year, taxpayers under the flat-rate scheme no longer benefit from a shorter assessment period than other taxpayers. This is laid down by Article 21 of Legislative Decree No 148 of 7 August 2026, in force since 12 August 2026, which repeals the rule under which, for those who issued only electronic invoices, the Italian Revenue Agency had four years instead of five to serve a notice of assessment. For 2026 income, declared in 2027, the period ends on 31 December 2032. For the years up to 2025 nothing changes, but the reduction continues to apply only to those who can prove that they met the requirement.

What the rule said and what has been removed

The flat-rate scheme is governed by paragraphs 54 to 89 of Article 1 of Law No 190 of 23 December 2014. Paragraph 74 refers, for assessment, collection, penalties and litigation, to the ordinary rules on direct taxes, VAT and IRAP (the regional tax on productive activities), in so far as they are compatible. From 1 January 2020 that reference was followed by an exception, added by Article 1(692)(f), point 1, of Law No 160 of 27 December 2019: “for taxpayers whose annual turnover consists exclusively of electronic invoices, the time limit referred to in Article 43(1) of Presidential Decree No 600 of 29 September 1973 is reduced by one year”.

Article 21(1) of Legislative Decree No 148 of 2026 deletes exactly those words, “with effect from the 2026 tax year”. The first sentence of paragraph 74 thus once again contains only the reference to the ordinary rules; the following sentences, on the untruthful statement of the eligibility requirements and on the termination of the scheme, remain unchanged.

The reduction had a narrower scope than is often recalled. It concerned only paragraph 1 of Article 43, that is, the assessment of income taxes where a return has been filed. It never affected paragraph 2 of the same Article, which sets the time limit at the seventh year where the return is omitted or null, nor Article 57 of Presidential Decree No 633 of 26 October 1972, which governs the time limits for VAT assessments; the latter matters to flat-rate taxpayers, who under paragraph 59 are exempt from paying VAT, above all when the tax authorities contend that the taxpayer has left the scheme and recover the VAT. Those who now lose the benefit therefore lose one year off the time limit for assessing declared income, and nothing else.

Why the legislature removed it

The reduction was conceived as a reward: those who opted for electronic invoicing, then optional for flat-rate taxpayers, made their data immediately visible to the tax authorities and in return were subject to a shorter period of review. That premise disappeared with Article 18(2) and (3) of Decree-Law No 36 of 30 April 2022, which extended mandatory electronic invoicing to flat-rate taxpayers from 1 July 2022, if in the previous year their revenue or fees, annualised, exceeded €25,000, and to all others from 1 January 2024: paragraph 2 abolishes the exemption they had enjoyed, and paragraph 3 sets the timetable for its entry into effect.

The explanatory report on the draft decree, sent to Parliament as Government Act No 430, says so explicitly: since mandatory electronic invoicing was extended to flat-rate taxpayers from 1 January 2024, “the rationale of the provision has ceased to exist”. The regulatory impact assessment accompanying the draft describes a difference in treatment compared with other taxpayers that had become anachronistic, and the technical report classifies the provision as procedural, entailing no new or additional charges for the public finances. A reward that everyone obtains by legal obligation is no longer a reward; it is merely a time limit that differs from everyone else’s.

When it applies, and why the amendment is made twice

The wording “with effect from the 2026 tax year” identifies the year to which the income relates, not the date of the audit. The reduction disappears for income earned in 2026 and declared in 2027; it remains in force, subject to the statutory conditions, for 2025 and earlier years. The explanatory report confirms this reading, referring the effect, verbatim, to “audits carried out in relation to tax years from 2026 onwards”.

Article 21(2) repeats the same deletion in Article 240 of the new consolidated text on income taxes, approved by Legislative Decree No 117 of 19 June 2026. The reason is one of timing. The consolidated text applies from 1 January 2027 and from that date repeals paragraphs 54 to 89 of Law No 190 of 2014, transferring the rules of the scheme to the new text; the content of paragraph 74 is reproduced in Article 240(1). Without this double amendment, the reduction, deleted from the 2014 Law, would have been revived in the consolidated text from 2027. And since the amendment to Article 240 also takes effect only from the 2026 tax year, for years up to 2025 the reduction must be regarded as still available in audits carried out after 1 January 2027.

From the same date the rules on assessment time limits also move: the rule now contained in Article 43 of Presidential Decree No 600 of 1973 is transferred to Article 293 of the consolidated text on compliance and assessment, approved by Legislative Decree No 141 of 5 August 2026, with the same wording on the fifth and seventh years. The numbering changes, not the substance.

The time limits, year by year

The ordinary period ends on 31 December of the fifth year following the year in which the return was filed. For those who file on time, that is, in the year following the one in which the income was earned, the picture is as follows.

For 2020 income, declared in 2021, the ordinary period ends on 31 December 2026; with the reduction, it expired on 31 December 2025. For 2021 income, declared in 2022, the ordinary period ends on 31 December 2027 and the reduced period on 31 December 2026. For 2022 income, declared in 2023, the ordinary period ends on 31 December 2028 and the reduced period on 31 December 2027. In 2020 and 2021 electronic invoicing was optional for all flat-rate taxpayers (for those not exceeding €25,000 it remained so until the end of 2023), and the reduction applies only to those who adopted it for the whole year. In 2022, for those above the €25,000 threshold, the obligation took effect in mid-year, and paper invoices issued in the first half of the year rule out the reduction for that year.

For 2023 income, declared in 2024, the ordinary period ends on 31 December 2029; with the reduction, on 31 December 2028. For 2024 income, declared in 2025, the ordinary period ends on 31 December 2030 and the reduced period on 31 December 2029. For 2025 income, the last year to which the reduction applies, declared in 2026, the ordinary period ends on 31 December 2031 and the reduced period on 31 December 2030.

For 2026 income, declared in 2027, there is a single time limit, 31 December 2032, regardless of the type of invoice issued. Where the return is omitted or null, the time limit remains the end of the seventh year following the year in which the return should have been filed: for 2026, 31 December 2034. The reduction never applied to this case.

The period runs from the year in which the return was actually filed. If the return was filed no more than ninety days late and the filing falls in the following calendar year, for example in January, the assessment period is also extended by one year. If the delay exceeds ninety days, the return is treated as omitted under Article 2(7) of Presidential Decree No 322 of 22 July 1998, and the time limit becomes the end of the seventh year following the year in which the return should have been filed.

The years up to 2025: the reduction remains, but must be proved

For tax years before 2026 the reduction has not been abolished, but it does not apply automatically. It is available only if the turnover for that year consisted “exclusively” of electronic invoices, and the requirement, according to the wording of the rule, which refers to “annual turnover”, must be checked year by year.

The only specific administrative guidance to be found is ruling No 520 of 29 July 2021 (a reply to a taxpayer’s request, known as risposta a interpello), issued when electronic invoicing was still optional for the taxpayer concerned. It concerned a flat-rate professional who had given a client a paper document and had then issued the electronic invoice late. The Agency stated that issuing invoices other than electronically entails, as a general rule, the loss of the benefit; it took the view, however, that if the error is corrected by issuing the electronic invoice late and settling the penalty through voluntary correction (ravvedimento operoso), the benefit is not lost, and that the paper document then counts merely as a receipt, with no tax relevance. It added that the power of the auditing bodies to verify in practice whether the conditions are met remains unaffected. For the years in which electronic invoicing was mandatory, the same solution applies by analogy, not because the Agency has expressly said so.

A number of recurring situations remain unresolved, with neither administrative guidance nor case law. The first concerns healthcare professionals: Article 10-bis of Decree-Law No 119 of 23 October 2018 prohibits the issue of electronic invoices for services whose data must be sent to the Health Card System (Sistema Tessera Sanitaria), and the prohibition has been extended to healthcare services provided to individuals even by those not required to send such data. Since 13 June 2025 the prohibition has been permanent, with no further annual deadlines, as a result of Legislative Decree No 81 of 12 June 2025. The problem arises for every year from 2020 to 2025 in which the healthcare professional issued in electronic form all the invoices not covered by the prohibition; from 2024, with the obligation extended to all flat-rate taxpayers, it affects in practice anyone who provided healthcare services to individuals. Those who issued paper invoices because the law required them to do so do not, on the wording, have a turnover consisting only of electronic invoices; the opposite view, that a legal obligation cannot cause the loss of the benefit, has its supporters but is not confirmed by any official source. Similar uncertainties concern transactions with foreign clients documented by invoices not sent through the Exchange System (Sistema di Interscambio), takings certified without an invoice, and the years in which a taxpayer enters or leaves the scheme.

In these cases the reduction should not be taken for granted. Those who receive, in the last year of the ordinary period, a draft measure or a notice relating to a year in which they believe they were entitled to the reduction, may object that the time limit has expired: as early as their observations on the draft measure sent to them for the prior hearing provided for by Article 6-bis of Law No 212 of 27 July 2000, and in any event as a ground of appeal against the notice, within sixty days of service. It is advisable to be able to document that the requirement was met.

Two-year advance tax agreement: the extensions do not concern current flat-rate taxpayers

The two-year advance tax agreement (concordato preventivo biennale) is no longer available to flat-rate taxpayers. Title III of Legislative Decree No 13 of 12 February 2024, Articles 23 to 33, which governed the agreement for flat-rate taxpayers, who had been admitted on an experimental basis for the 2024 tax year only, was repealed by Legislative Decree No 81 of 12 June 2025.

The extensions of time limits linked to the agreement concern taxpayers subject to the synthetic tax reliability indices (ISA). Article 29 of Legislative Decree No 148 of 2026 restricts the new voluntary correction for tax years 2020 to 2023 to ISA taxpayers who renew their participation for the two-year period 2026–2027; where it exceptionally admits certain taxpayers excluded from the indices, it requires that they do not determine their income on a flat-rate basis. Paragraph 17 extends to 31 December 2029 the time limits for the years covered by the voluntary correction and, in any event, to 31 December 2027 the time limits expiring on 31 December 2026 for ISA taxpayers who renew.

Those who are flat-rate taxpayers today fall outside these measures, and from 2026 their time limit is the ordinary one. One case, however, needs checking: a former flat-rate taxpayer who now, as an ISA taxpayer, renews the agreement may find that the time limits are also extended for years in which the flat-rate scheme was applied, for example 2020, whose ordinary period ends on 31 December 2026, or 2021, whose reduced period ends on the same date. The rule refers to the taxpayer’s time limits, not to the scheme applied in each year, and we are not aware of any clarification on the point.

What changes for record-keeping

Flat-rate taxpayers are exempt from keeping accounting records, but not from retaining documents. Paragraph 69 of Article 1 of Law No 190 of 2014 preserves the obligation, laid down in Article 22 of Presidential Decree No 600 of 1973, to retain the documents received and issued; and Article 22 requires them to be kept until the assessments relating to the tax year have been finalised. From 1 January 2027 the two rules will move, respectively, to Article 236 of the consolidated text on income taxes and to Article 29 of the consolidated text on compliance and assessment, but their content will not change.

The practical consequence is this: if the return is filed in 2027, documents for 2026 must be kept at least until 31 December 2032, until 31 December 2034 if the return is omitted, and beyond that if an audit or a dispute concerning that year is under way. Flat-rate taxpayers who are commercial entrepreneurs and do not qualify as small entrepreneurs are also subject to the ten-year retention obligation of Article 2220 of the Civil Code, from which small entrepreneurs are exempted by Article 2214. Small-entrepreneur status is assessed under Article 2083 of the Civil Code, not under tax thresholds; and since the ten years run from the last entry in the records, which flat-rate taxpayers do not keep, it is prudent to count them from the date of the document. Those who had set up their document retention, including electronic retention, on the basis of the reduced period must extend it by one year starting with the 2026 documents.

In practice

Anyone who receives a notice relating to 2020 during 2026 should check at once whether all invoices for that year were electronic: if so, the reduced period had already expired on 31 December 2025. For 2021 the reduced period ends on 31 December 2026, subject to the extension to 31 December 2027 for those who are now ISA taxpayers and renew the advance tax agreement.

The schedule of time limits must be updated: for flat-rate taxpayers, from the 2026 tax year, the period ends on 31 December of the fifth year following the filing of the return, as for any other taxpayer, and on 31 December of the seventh year if the return is omitted.

For 2025 and earlier years, it is advisable to gather evidence now that the requirement was met: the full list of invoices issued in the year, the files sent through the Exchange System with the related receipts, and the documentation of any errors corrected, such as an electronic invoice issued late and the payment made under voluntary correction. This is what will be needed to plead that the time limit has expired against a notice served in the last year of the ordinary period.

Anyone who issued even a single non-electronic document in a year, by choice, through an uncorrected error or because of the prohibition affecting healthcare services, would do well to apply the ordinary time limit to that year. The more favourable view can always be argued during an audit, but it is not the basis on which document retention should be planned.

The rest of the scheme does not change: the eligibility requirements, the grounds for exclusion, the rate of the substitute tax and the penalty rules remain the same. The only change is the length of time during which declared income can be audited.

Frequently asked questions

I am a flat-rate taxpayer and issued only electronic invoices in 2026: am I still entitled to the reduced period?

No. From the 2026 tax year the reduction no longer exists for anyone, regardless of the type of invoice issued. For 2026 income, declared in 2027, the Agency may serve the notice of assessment until 31 December 2032; if the return is omitted, until 31 December 2034.

For 2024 and 2025, is the period still four years?

Yes, but only if in the year concerned the turnover consisted exclusively of electronic invoices: for 2024 income the reduced period ends on 31 December 2029 instead of 31 December 2030, and for 2025 income on 31 December 2030 instead of 31 December 2031. According to the Agency, in ruling No 520 of 2021, a non-electronic invoice as a general rule causes the loss of the reduction, unless the error is corrected by issuing the electronic invoice late and making a voluntary correction. The cases of healthcare professionals who could not issue electronic invoices, cross-border transactions, takings certified without an invoice and years of entry into or exit from the scheme have not been clarified officially: in these cases it is prudent to apply the ordinary time limit.

How long must I keep my 2026 invoices?

If the return is filed in 2027, at least until 31 December 2032; if it is omitted, until 31 December 2034. In either case, longer if an audit or dispute concerning that year is under way, because the law requires documents to be kept until the assessments have been finalised. If you carry on a commercial business and do not qualify as a small entrepreneur, the ten-year period of the Civil Code applies in any event.

Sources

Article 21 of Legislative Decree No 148 of 7 August 2026, Ordinary Supplement No 30/L to the Official Gazette, General Series, No 185 of 11 August 2026, in force since 12 August 2026; text republished with notes in Ordinary Supplement No 33 to Official Gazette No 205 of 4 September 2026.

Article 1(59), (69) and (74) of Law No 190 of 23 December 2014, text in force on 31 December 2025 and on 21 September 2026 (Normattiva).

Article 1(692)(f), point 1, of Law No 160 of 27 December 2019, which had introduced the reduction from 1 January 2020.

Articles 22 and 43 of Presidential Decree No 600 of 29 September 1973, and Article 57 of Presidential Decree No 633 of 26 October 1972, text in force on 21 September 2026.

Article 18(2) and (3) of Decree-Law No 36 of 30 April 2022, converted by Law No 79 of 29 June 2022, on the extension of mandatory electronic invoicing to flat-rate taxpayers.

Article 10-bis of Decree-Law No 119 of 23 October 2018, converted with amendments by Law No 136 of 17 December 2018, and Article 9-bis(2) of Decree-Law No 135 of 14 December 2018, converted with amendments by Law No 12 of 11 February 2019, on the prohibition of electronic invoicing for healthcare services; Article 2 of Legislative Decree No 81 of 12 June 2025, which made it permanent from 13 June 2025.

Articles 236, 240, 376 and 377 of the consolidated text on income taxes approved by Legislative Decree No 117 of 19 June 2026, applicable from 1 January 2027.

Articles 29(1) to (4), 293, 367(1)(h) and 368 of the consolidated text on compliance and assessment approved by Legislative Decree No 141 of 5 August 2026, applicable from 1 January 2027.

Article 29(1), (7) and (17) of Legislative Decree No 148 of 7 August 2026, on the voluntary correction and on the extension of time limits for ISA taxpayers renewing the two-year advance tax agreement.

Title III, Articles 23 to 33, of Legislative Decree No 13 of 12 February 2024, repealed by Legislative Decree No 81 of 12 June 2025.

Article 2(7) of Presidential Decree No 322 of 22 July 1998, on returns filed more than ninety days late.

Article 6-bis of Law No 212 of 27 July 2000, on the prior hearing.

Government Act No 430, 19th legislature: explanatory report, technical report and regulatory impact assessment on the draft legislative decree, Article 20 of the draft.

Italian Revenue Agency, ruling No 520 of 29 July 2021, on the requirement of turnover consisting exclusively of electronic invoices.

Articles 2083, 2214 and 2220 of the Civil Code.