Net Income on €25,000 Flat-Rate at the 5% Start-Up Rate

With the reduced 5% rate on €25,000 in revenue, net income rises to about

19.196 € per year

Who Is Entitled to the 5% Rate

The reduced 5% substitute tax rate, instead of the ordinary 15%, applies for the first 5 years of activity to new VAT registrations that meet specific legal requirements: not having carried out, in the previous three years, an artistic, professional, or business activity even in associated or family form; the new activity must not be a mere continuation of a previous activity carried out as an employee or self-employed worker (except for mandatory training periods); if continuing an activity carried out by others, the previous year's revenue must not exceed the flat-rate scheme threshold.

Comparison Table

Note on Assumptions Used

Calculation based on a 78% ATECO coefficient, INPS Separate Scheme at 26.07% (contributions are identical in both cases, only the substitute tax rate changes). The net income difference grows proportionally with revenue.

Planning the 5 Years of Reduced Rate

Since the 5% rate is limited to the first 5 years of activity, it's useful to plan ahead for the transition to the ordinary 15% rate from the sixth year onward, perhaps setting aside the tax savings from the first years to more comfortably handle the subsequent increase in tax burden.

Other Flat-Rate Scheme Questions

• • What flat-rate revenue corresponds to a €25,000 salary
• • Better €25,000 as an employee or flat-rate self-employed
• • Monthly net income of a €25,000 flat-rate business
• • Net income calculation for a €25,000 flat-rate business
• • How much tax is paid on €25,000 in the flat-rate scheme
• • 15% flat-rate taxation on €25,000: an example

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