Italy Tax Agency Clarifies Rules on Taxable Income, Thresholds, Refunds Under Flat-Rate Tax Regime

The Italian Revenue Agency Feb. 10 issued Letter No. 26/2026, clarifying rules on taxable income, thresholds, and refunds under the flat-rate tax regime. The taxpayer, a medical professional under the flat-rate tax regime, received excess compensation that was reported in their tax certification (CU) and caused their income to exceed the 85,000 euro (US$101,145) threshold. The taxpayer sought clarification regarding whether the refunded amount of the overpayment could be excluded from their taxable income calculation. Upon review, the Tax Agency clarified that: 1) under the regime, all amounts actually received during the year are taxable and included when calculating the ...