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Italy to consolidate VAT rates

Italy tax reforms may consolidate 3 reduced rates to 2

As part of a sweeping range of tax reforms announced by the Council of Minister, there are plans to simplify the Italian VAT rates. There will also be changes and improvements to the rules on deductibility and VAT group rules.

The current standard rate is 22%. There are then three reduced rates (as well as zero-rating), with some example eligible supplies:

  • 10% – foodstuffs; domestic passenger transport; hotels; restaurants; cafes
  • 5% – some foodstuffs; social services
  • 4% – some foodstuffs; books; newspapers; social agricultural supplies

It is likely, but not confirmed, that the 5% and 4% rates will be consolidated.

Read more in our Italian VAT guide, covering rates, compliance and reporting.

Other countries considering consolidating their rates include Czech and Belgium.

In 2022, the EU reduced VAT rate freedoms was agreed to give member states more range of reduced rates. Member states may now use this provision.


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