If you’re working as a freelancer, consultant, or service provider in Italy, there’s a good chance you’ve encountered the term ritenuta d’acconto. For many professionals—especially those just starting out—this withholding tax can be a confusing part of the invoicing process. Yet, understanding how it works is essential to managing your income and staying compliant with Italian tax laws.
In this guide, we’ll walk you through what ritenuta d’acconto is, when it applies, how to apply it on your invoices, and how to handle it when tax season arrives. Whether you’re a self-employed professional or provide occasional services, this article will help clarify your obligations and rights.
What Is Ritenuta d’Acconto?
The term ritenuta d’acconto translates literally to “advance withholding tax.” It refers to a portion of your earnings—typically 20%—that is withheld from your payment by the client and paid directly to the Italian tax authorities (Agenzia delle Entrate) on your behalf. Essentially, it’s a way for the state to collect income tax in advance, rather than waiting for individuals to pay it all at once at the end of the year.
For professionals, this means you’ll receive a reduced amount upfront (your payment minus the withheld tax), but that withheld amount will be credited toward your overall income tax when you file your return.
You can find the official explanation on the Agenzia delle Entrate website.
Who Needs to Apply It?
Ritenuta d’acconto primarily applies to two categories of workers in Italy: freelancers with a VAT number (Partita IVA) and those who perform occasional, non-continuous work.
If you’re a freelancer and not enrolled in the flat-rate tax regime (called regime forfettario), you are usually required to include ritenuta d’acconto on your invoices. Your client will then deduct 20% from the amount you invoice and send it to the tax office, paying you the remaining 80%.
On the other hand, if you are under the flat-rate regime, you are exempt from applying ritenuta d’acconto. In this case, you should include a specific note on each invoice to clarify that the transaction is not subject to withholding. The standard phrase is:
“Operazione non soggetta a ritenuta d’acconto ai sensi dell’art. 1, comma 67 della Legge 190/2014.”
The same rule applies to people who provide services occasionally without a VAT number. In those cases, clients still need to withhold 20% and pay it to the authorities, since occasional work is still subject to income tax withholding under Italian law.
How Does It Work in Practice
To illustrate how ritenuta d’acconto works, consider a simple example. Let’s say you’re a freelance graphic designer not enrolled in the flat tax regime, and you invoice a client for €1,000 for your services. Since ritenuta d’acconto applies, the client withholds 20%, or €200, and pays that amount to the tax office. You receive €800 in your bank account. The €200 that was withheld isn’t lost—it will be deducted from your final tax bill when you file your return.
This system is designed to prevent underreporting and tax evasion by ensuring that a portion of taxes is paid in real time, rather than retroactively.
How to Include Ritenuta d’Acconto on an Invoice
When issuing an invoice with ritenuta d’acconto, it’s important to list the gross amount for your services, and then indicate the deduction for the withholding tax. If you’re charging VAT, remember that ritenuta is calculated on the net amount before VAT.
Here’s how a typical invoice would look:
- Service provided: €1,000
- Ritenuta d’acconto (20%): –€200
- Amount due: €800
- VAT (if applicable): listed separately
- Legal reference: include the note “Ritenuta d’acconto ex art. 25 del DPR 600/1973”
For those under the flat tax regime, you would simply omit the ritenuta line and include the exemption clause mentioned earlier.
Responsibilities of the Client
In this system, the client acts as the withholding agent (sostituto d’imposta), meaning they are responsible for paying the ritenuta directly to the tax office on your behalf. This is done using the F24 form, a standard form used in Italy for tax payments. The payment must use the code 1040 to indicate that it’s for withholding on self-employment income.
In addition, by March 16 of the following year, the client must provide a document known as the Certificazione Unica. This is a summary of the total payments made to you and the taxes withheld. A copy of the certification must also be submitted electronically to the Agenzia delle Entrate.
Failure to withhold and report correctly can result in fines and penalties for the client—not the freelancer. You can read more about the F24 process here, and find info on Certificazione Unica here (in Italian).
How to Declare It on Your Tax Return
When tax season comes around, freelancers must declare their full income, including the gross amount before withholding. On the income tax return (either Modello Redditi or 730), you’ll also include the total amount that was already withheld and paid via ritenuta d’acconto.
This amount is then subtracted from your final tax liability. If you’ve had more withheld than you owe, you’ll receive a refund. If less, you’ll pay the difference. Your tax advisor or accountant will guide you through this process to ensure everything is correctly reported.
What About the Flat Tax Regime?
One of the benefits of the regime forfettario—which many small freelancers and start-ups in Italy use—is that it exempts you from ritenuta d’acconto. This simplifies cash flow and invoicing, as you receive the full payment from the client without deductions. You still pay taxes at the end of the year, but there are no advance withholdings throughout the year.
To avoid confusion, you must clearly indicate on every invoice that you are under the flat-rate regime and not subject to withholding. This ensures your client knows they are not responsible for making the payment to the tax office.
More information is available on the Agenzia delle Entrate’s page for self-employed workers.
Common Mistakes to Avoid
A few errors frequently trip up freelancers dealing with ritenuta d’acconto. One is forgetting to apply it when required—especially if you’re not under the flat tax regime. Another is miscalculating the amount, particularly when VAT is also involved. Always remember that the 20% ritenuta is applied to the amount before VAT.
Also, some professionals under the flat-rate regime mistakenly apply ritenuta on their invoices. This can create administrative confusion and requires correction. Lastly, clients sometimes fail to pay the withheld amount to the government or forget to issue the Certificazione Unica. While these aren’t your legal responsibilities, it’s worth gently reminding clients to handle them properly, especially if they’re unfamiliar with the process.
Over to you
The ritenuta d’acconto system is one of the defining features of working independently in Italy. Though it can feel complex at first, it’s ultimately a method of collecting income tax in real time. Once you understand when it applies and how to manage it correctly, it becomes just another part of your invoicing routine.
If you’re uncertain whether ritenuta applies to your specific case—or you want help managing invoices and reporting—it’s always wise to consult a commercialista (tax advisor) familiar with the nuances of freelance taxation.
By staying informed and organized, you’ll avoid costly errors and keep your freelance business running smoothly within the Italian tax framework.
