For those who adhere to the Flat-rate scheme, it is not possible to determine deductible expenses in the traditional sense commonly associated with VAT. Instead, these expenses are established based on the type of activity performed, using the profitability coefficient.
The profitability coefficient is expressed as a percentage specific to each activity. It determines the portion of turnover subject to taxation, while the remainder is considered the cost incurred to carry out the activity. The advantage of this system is that expenses are deducted from the turnover regardless of whether they have actually been incurred, thereby reducing the taxable amount.
Additionally, social security contributions already paid are deducted from the taxable base. This applies both to INPS Gestione Separata contributions for professionals and to INPS contributions paid by sole proprietorships registered with the Chamber of Commerce as craftsmen or merchants. Professionals affiliated with a professional register can only deduct subjective and maternity contributions.