Ritenuta d'acconto: how Italian withholding tax works

What the ritenuta d'acconto is

You invoiced 1,000 euro and 800 arrives in your account. Nothing has been taken from you: those 200 euro have already been paid on your behalf, as an advance on the IRPEF you will declare next year.

That is the whole mechanism. The ritenuta d'acconto is not an additional tax and not a cost: it is part of your income tax, collected the moment the fee is paid rather than waiting for the annual return. The person paying it over is not you but your client, who in Italian tax law is a sostituto d'imposta, a substitute taxpayer standing in your place for the payment obligation.

The advantage to the treasury is plain: it collects earlier, and on a figure reported by someone other than the taxpayer. For you the position is neutral, because the amount comes back as a credit in your return.

How it works, step by step

1. You issue the invoice with the fee, any VAT, and the withholding shown.
2. The client pays you the net, that is the invoice total less the withholding.
3. The client pays the withholding to the Agenzia delle Entrate on form F24, by the 16th day of the month following the month they paid you.
4. The following year they give you a Certificazione Unica, the statement of what you received and what was withheld.
5. You offset it in your return against the IRPEF due. If the withholding exceeded the tax, the difference is a refund or a credit.

The trigger is the payment, not the invoice date: the withholding is operated "all'atto del pagamento", at the moment of payment. A December invoice paid in January produces a withholding belonging to the new year.

The base: the part almost everybody gets wrong

The 20% rate is the easy part, and it is also the part that is almost never wrong. What changes the answer is which invoice lines it applies to.

The withholding is not charged on the invoice total. Of the lines that can appear on an Italian professional invoice, each behaves in its own way:

The two middle rows are the ones that cost money, and on an invoice they look almost identical: both read as "4% for social security".

The two 4% contributions that are not the same thing

The INPS rivalsa for the gestione separata is the contribution you owe the INPS, which the law lets you charge on to the client. For tax purposes it is fee income: it is yours, before you pass it to the institute. So it enters both the VAT base and the withholding base.

The contributo integrativo of a private professional fund (Cassa Forense, Inarcassa, ENPAM and the like) is not your income: it is a pass-through you collect for the fund and hand over. It enters the VAT base but stays outside the withholding base.

The same 4% on a 1,000 euro fee:

The invoice total is identical to the cent. The withholding differs by 8 euro, and the only thing producing that difference is the nature of that one line.

Expense reimbursements: the receipts decide

With expenses too, the distinction is not the label but the documentation.

Expenses analytically documented and advanced in the client's name and on their behalf, under article 15 of DPR 633/1972, are not your fee: you incurred them for the client and are being reimbursed. They stay outside VAT, outside the withholding base, and are added to the total untouched.

A flat allowance, a round figure with no documents behind it, is fee income and enters both bases.

The same 200 euro, on a 1,000 euro fee:

Forty euro of withholding and forty-four of VAT, decided by a receipt.

The rates

20% on self-employment

This is the ordinary rate on self-employment fees paid to residents, and it has been 20% since 1998 (18% before, then 19%). It applies to fees "comunque denominati", however described, for self-employment services, even where not carried on habitually: that is why a one-off engagement follows the same rule as a professional with a VAT number.

It does not apply to services rendered in the course of a business: a company invoicing you for work does not suffer this withholding.

30% for non-residents, and it is not an advance

On fees paid to non-residents the rate is 30% and it is a final withholding (a titolo d'imposta), not an advance. The difference is not the rate: it is that this withholding settles the Italian tax liability and is not recovered in a return. Same word, two different instruments.

Commissions: 23% on half

For commissions in agency, brokerage, commercial representation and business introduction, the statute writes no percentage at all. It refers to the first IRPEF bracket rate, which is 23% today: if a future budget law moves that bracket, this withholding moves with it.

And the rate does not apply to the whole commission. The withholding is "commisurata al 50 per cento", measured against 50% of the amount, falling to 20% if you declare to the principal that you make continuous use of employees or third parties.

Saying "commissions are withheld at 23%" without naming the base overstates it twofold. The declaration about auxiliaries is worth 69 euro per thousand on its own.

One-off and occasional work

An occasional engagement with no VAT number follows the self-employment rule: a 20% withholding on the fee, no VAT to charge because there is no VAT number, and a receipt instead of an invoice.

On an occasional fee of 500 euro the withholding is 100 euro and you receive 400. As long as occasional self-employment fees stay within 5,000 euro a year there is no obligation to register with the INPS gestione separata, so there is no contribution to add.

There is one case where the amount itself removes the withholding, but it is narrower than usually reported: fees below 25.82 euro paid by non-commercial entities for non-habitual self-employment, and only where they are not an advance on larger sums. It turns on who pays, not only on how much: outside that perimeter even a 20 euro fee carries its 4 euro withholding.

Regime forfettario: no withholding

A professional under the regime forfettario sits outside the mechanism. Revenues and fees forming forfait income are not subject to the withholding, because that income pays a substitute tax rather than IRPEF: advancing IRPEF would make no sense.

The exemption is not automatic, though. You must give the client a declaration stating that the income bears the substitute tax, normally as a line on the invoice citing article 1, comma 67 of law 190/2014. Without that declaration the substitute taxpayer must apply the withholding.

A forfettario also charges no VAT, by virtue of comma 58 of the same article. Both consequences flow from the same choice of regime: a 1,000 euro forfettario invoice is worth 1,000 euro and is collected in full.

Advance or final: the distinction that weighs more than the rate

For a resident the withholding is on account, and the phrase should be read literally: you have already paid that income tax. In your return you offset it against the tax due and, if you paid more than you owed, the difference returns as a refund or stays as a credit.

For a non-resident the 30% is final: not recoverable, not claimable as a credit.

This is why treating the withholding as a cost is an accounting error: on 1,000 euro invoiced your revenue is 1,000 euro, not 800. The 800 is merely the part you received in cash; the 200 is a receivable from the tax authority.

The legal citation changes address on 1 January 2027

Almost every page on this subject cites articles 25 and 25-bis of DPR 600/1973, and until 31 December 2026 they are right to.

From 1 January 2027 those two articles are repealed and their content becomes articles 38 and 39 of the Testo unico on payments and collection (legislative decree 24 March 2025, no. 33). This is a consolidation, not a reform: 20% for self-employment, 30% for non-residents, the first IRPEF bracket on 50% or 20% of commissions. The substance stays; the citation changes.

It is worth knowing for two practical reasons: an invoice or an opinion citing article 25 after that date cites a repealed provision, and a source that has not recorded the handover is a source that has not been updated.

One last point, because it appears even on widely read pages: the reference for self-employment is not article 23. Article 23 is the withholding on employment income. Self-employment is article 25, and from 2027 article 38.

A full worked example

A consultant in the INPS gestione separata, a 1,000 euro fee, the 4% rivalsa, standard VAT.

The client transfers 1,060.80 euro to you and pays 208 euro to the Agenzia delle Entrate by the 16th of the following month. The withholding is 20.8% of your fee, not 20%, because the rivalsa entered the base.

From the fee to your own number

The variables that matter are few but they combine: the type of service, the tax regime, which social-security line appears on the invoice, and whether the expenses are documented. The Italian withholding tax calculator puts them together and shows the invoice line by line, separating the VAT base from the withholding base.

If you are preparing the invoice, the Italian VAT calculator completes the other half of the document, and the guide on how Italian VAT is calculated explains why the two bases never coincide.