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Italy to simplify reduced VAT rates

Reducing VAT complexity and fraud

The Italian Council of Minister has confirmed proposals to simplify the Italian tax regime by Draghi-Franco reforms, including simplifying the use of reduced VAT rates. The aim is to streamline the number of supplies of goods or services which can benefit from the reduced rates to help businesses comply and reduce fraud opportunities.

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Strmeamling from three reduced rates to one

Italy currently has a standard VAT rate of 22%. It has three reduced rates, which will likely be reduced to just one in the reforms, contained in Table A, Part II , II-bis and III, attached to Presidential Decree 633/72, which comply with the limits set out in articles 96 to 99 of the VAT directive.

  • 10% Most foodstuffs; restaurants and cafes; hotels; water; theatre; some pharmaceutical products; domestic passenger transport; admission to cultural events; some social housing; renovation and repair of private dwellings; some construction work
  • 5% Some foodstuffs; some social services; certain passenger transport
  • 4% Some foodstuffs; certain medical equipment; books; newspapers and some periodicals; e-books; online journals newspapers; TV licence; social housing; medical; some agricultural
  • 0% Export; Intra-community; and international transport

The Italian parliament will now consider the proposal, which includes many other tax reforms. You can review over 220 country global VAT and GST rates in our free searchable database.

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