Second extension of gas VAT cuts until 30 June 2022 as inflation hits 5.7%
Italy has extended the temporary cut in Value Added Tax rate on domestic and industrial use gas until 30 June 2022. The cut was initially introduced between October and December 2021, and then rolled over to January to March at the start of 2022. Many other EU states cutting VAT on fuel. Belgium has in the past cut the VAT rate to 6% on energy fuel.
Italian inflation has risen to 5.7% in February 2022, up from 4.8% in January. You can receive our regular global VAT and GST news by signing up today!
2022 Budget responds to spiralling inflation with energy VAT cut and other measures
Italy had approved its 2022 budget which included the following measures:
- Gas for domestic and industrial production are cut to 5% between 1 January and 31 March 2022. This is a continuation of the cut for October to December 2021. This latest measure not pushes this out to June 2022.
- The plastic tax and sugar taxes implementations are delayed until 2023
- Feminine hygiene products (tampons) are cut to 10% VAT rate
In December 2021, EU finance minister agreed new reduced EU VAT rate setting freedoms which should come into place before April 2022.
Learn more about Italian VAT in our country guide.