Italian Third Sector: Revenue Agency Circular 1/E/2026 clarifies the new tax framework

Italian Revenue Agency Circular No. 1/E of 19 February 2026 explains how the new tax framework for Third Sector Entities (Enti del Terzo settore – ETS) applies from 2026. The main issues concern registration with the Single National Register of the Third Sector (RUNTS), the non-commerciality test under Article 79 of the Third Sector Code and the flat-rate regime under Article 86 for ODV and APS entities.

Law or administrative guidance: what is the legal status of the Circular?

The Circular is administrative guidance: it does not amend the law, but sets out the Revenue Agency’s interpretation of the new provisions applicable from 2026.

What changes for former ONLUS entities?

For former Italian non-profit organisations known as ONLUS, the Circular recalls the 31 March 2026 deadline for applying to the RUNTS. Where the application is accepted, the status of Third Sector Entity (Ente del Terzo settore – ETS) applies without interruption from the beginning of the tax period.

How does the non-commerciality test work?

A key issue is the non-commerciality test under Article 79 of the Third Sector Code. As a general rule, activities of general interest are treated as non-commercial when the relevant consideration does not exceed actual costs. A tolerance applies: the activity remains non-commercial where revenues exceed costs by no more than 6%, provided this occurs for no more than three consecutive tax periods. For entities with total proceeds below EUR 300,000, the Circular allows, in the cases described, an overall assessment of the activities carried out.

Which flat-rate regime applies to ODV and APS entities?

For Volunteer Organisations (Organizzazioni di volontariato – ODV) and Social Promotion Associations (Associazioni di promozione sociale – APS), 2026 is also the first year of application of the flat-rate regime under Article 86 of the Third Sector Code, subject to the statutory threshold of EUR 85,000 of commercial revenues.

What should the Third Sector Entity do?

What are the main legal and administrative references?

Legal and administrative references: Legislative Decree No. 117 of 3 July 2017, in particular Articles 79 and 86; Italian Revenue Agency Circular No. 1/E of 19 February 2026.