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Italy extends again gas VAT cut to 5% until 31 December 2022

Third extension of gas VAT cuts until 31 December 2022 as inflation hits 7.9% in July 2022

Italy has extended for the forth time the temporary cut in Value Added Tax rate on domestic and industrial use gas until the year end. Italian inflation has risen to 7.9% in July 2022, up from 6.8% in March. This is the highest level in over 30 years.

The cut was initially introduced between October and December 2021, and then rolled over to January to March at the start of 2022. And a further time to 30 June 2022; the third extension was until 30 September. Many other EU states cutting VAT on fuel.

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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 the end of December 2022. This is a continuation of the cut for October to December 2021.
  • The plastic tax and sugar taxes implementations are delayed until 2023
  • Feminine hygiene products (tampons) are cut to 10% VAT rate

In April 2022, EU states passed new reduced EU VAT rate setting freedoms .

Learn more about Italian VAT in our country guide.

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