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Italy extends gas VAT cut to 5% until 31 Dec 2023

Further extension of VAT rate cut to natural gas supplies until 31 December 2023

Italy has gazetted an eighth  extension to the super reduced VAT rate on the supply of nature gas. The rate will continue to be 5%. The current temporary cut from 2021 was due to run out on 1 October 2023.

The cut relates to the following supplies:

  • Gas, district heating, and energy produced with methane gas; and
  • Gas system charges

April 2023 – Sixth extension of gas VAT cuts until 30 June 2023 as inflation lowers to 7.7% in March 2023

Italy has again rolled over the reduction in VAT rate to 5% of the following heating supplies.

Jan 2023 – Fifth extension of gas VAT cuts until 31 March 2023

Italy has extended for the forth time the temporary cut in Value Added Tax rate on domestic and industrial use gas until the Spring. Italian inflation has dipped to 12.3% in December 2022, down from 12.6% in November. 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. The fourth to 31 December 2022. 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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