The flat rate tax calculation is very useful to understand which taxes we will have to pay in the course of the year.
Although the flat-rate scheme does provide for some facilities, it is still important to have tax planning that allows you to plan future expenses and projects.
Let’s see then what are the innovations on the subject and why it is important to make a flat rate tax calculation, taking into account the simplifications provided.
Fee calculation flat rate: how it works and the facilities available
Many entrepreneurs in recent years have had the opportunity to start up their own business using the new flat rate scheme . This is a novelty introduced by the 2015 Stability Law, and subsequently reformed by Law 208/2015 (the 2016 Stability Law).
A very recent possibility, but which was immediately accepted by the small and medium-sized entrepreneurs who can enjoy the simplifications and facilities provided by the same flat rate .
This possibility was designed precisely to allow entrepreneurs who lead a small business to more easily juggle the bureaucratic and financial labyrinth that generally characterizes these companies.
How the flat rate tax calculation works
At the base of this regime, as we have said, there are some facilitations in bureaucratic and fiscal matters.
First of all, the taxable income is calculated with the profitability coefficient to be applied to the actual revenues. The profitability coefficient indicates the share of revenues on which to calculate taxes and the portion that is not subject to taxation as a lump sum expense.
The application of the tax rate is important for the calculation of the flat-rate tax: in fact, this is different from the one reserved for the ordinary regime. The rate for the flat rate is generally 15%, however in some cases for the first 5 years of activity it can even drop to 5%.
There are differences with respect to the ordinary regime also with regard to the contribution aspect. In fact, if the subject carries out the activity of a craft business or a merchant, it is possible to request a 35% reduction on INPS contributions.
Obviously a fundamental requirement for being able to work with the flat rate scheme is to reside in Italy or produce at least 75% of income on the Italian territory.
Obligations and exemptions
The characteristics belonging to the flat rate scheme are also other. For example, unlike the ordinary regime, there is no obligation to record invoices and purchases. Likewise, there is no obligation to keep documents except purchase invoices and customs bills. There is no obligation to declare VAT, nor to charge VAT on invoices issued.
The novelties for the flat-rate tax calculation of 2019
But with the latest stability law approved by the yellow-green government, further innovations have been introduced for the management of the flat-rate scheme.
In fact, starting from 1 January, the Flat Tax has begun to have validity for all companies and freelancers who have a maximum revenue of € 65,000 per year.
The Flat Tax, announced last year by the government, will have a progressive application over the next few years.
Another novelty introduced by the Budget Law is the extension of the flat-rate scheme, whose maximum threshold will be raised to € 100,000 instead of the € 65,000 currently in force. In this case, it is to be kept in mind for the flat rate tax calculation that the substitute tax will be equal not to 15% as for the previous threshold, but to 20%. However, the exemption from the electronic invoicing obligation expires.
The growth in VAT numbers
Since the approval of the law, last year, there has been a constant increase in the opening of VAT numbers, as reported by the Sole 24 Ore.
It seems that most of these new entrepreneurs are former employees and retirees, who have not missed the tasty opportunity. In fact, 26,000 of the new VAT numbers belong to the age group between 51 and 65, with a preference for the technical consulting sector. Another significant slice of the former employees belongs to the 30-year-olds group, easily identifiable with the young people who have expired a fixed-term contract and who have decided to attempt the adventure of a free-lance profession.
However, as part of this new wave also includes some false VAT number that could take advantage of the flat-rate tax calculation, it was established the prohibition to receive compensation from employers dependent in the 2 years following the opening of the company.
The new requirements of 2019
The same Budget Law has changed some of the requirements for the flat rate scheme. The Government has in fact decided to eliminate:
- The limit of € 5,000 for ancillary and dependent labor costs and for the compensation of employees;
- The € 30,000 limit for perceived employment income (replaced by the ban we mentioned earlier)
- The limit of € 20,000 for the cost of capital goods.
The 5% tax
We have said that there are cases in which, for the first 5 years of activity, a tax rate of 5% should be considered for the calculation of the flat-rate tax. When can it happen?
This rate applies when:
- The subject has not exercised artistic, professional or business activities in the three years preceding the start of the activity;
- The company started is not the continuation of a previous employee work activity (except in cases where a previous training period is mandatory).
The choice of the flat rate scheme is certainly attractive, but it must be well thought out. Even in the ordinary regime, in fact, there are subsidies, such as those for the family situation. At this point it is therefore necessary to carry out a cost / benefit analysis that allows to choose the best alternative.