Skip links

Italy VAT country guide

VAT compliance and reporting rules in Italy

Below is summary of the major rules provided under Italian VAT rules (VAT Act (DPR 633/72)), plus adoption of EU VAT Directive provisions. Check our country VAT guides for other jurisdictions.

Our VAT Calculator & VAT Filer products on a single platform, VAT Calc,  are unique in that they come with all of this included out-of-the box for Italy and scores of other countries around the world.

Italy VAT country guide

Highlights Local term Imposta sul valore aggiunto, IVA
VAT Rates - standard 22%
VAT Rates - reduced 10%; 5%; 4%
VAT number format IT 12345678901
Registration threshold €65,000 per annum; nil for non-residents; €10,000 for pan-EU digital services and goods OSS return. Intra-community acquisitions €10,000
VAT Group Yes - two optional types: liquidation group for sharing credits against group member liabilities; regular group per VAT Directive since 2018
VAT recovery foreign businesses Yes, but requires reciprocity agreement for non-EU businesses
Fiscal Representative Required (Norway and UK excepted) for non-EU businesses
Currency Euro €, January 1999
Administration Introduction VAT introduced in 1973. Italy is a founding member of the European Union
VAT laws VAT Act (DPR 633/72); Also EU VAT Directive which takes supremacy as part of EU membership
Tax Authorities Agenzia delle Entrate; Ministry of Finance. Pescara regional office manages non-resident businesses
VAT Rates Standard rate 22%
Reduced rates 10%: restaurant and catering services, including takeaway; medicines. 5%: health and education by welfare associations. 4%: Basic foodstuffs; medical equipment; books and journals
Zero-rated Intra-community passenger travel by air and sea; Exports and intra-community supplies of goods; gold to central banks
Exempt Education; financial services; health, hospital,  and social welfare; postal; letting immovable property; betting and gambling; welfare services
Scope of VAT Scope of VAT Provision of domestic taxable goods and services; EU imports; intra-community acquisitions; Distance selling of goods B2C (OSS or IOSS); receipt of services or goods via the reverse charge
Time of supply Goods & Services (general rule) Goods: earliest of date of delivery; payment; date of invoice. Services: earliest of invoice issued or full/partial payment
Reverse Charge For services, when completed or payment if earlier
Continuous  Services Date of payment due. Annual if no invoice or contract provided
Imports At time of clearing into free circulation in Italy
Goods on approval and return Earliest of goods accepted or 12 months after dispatch
Registration VAT registration threshold €65,000 per annum; nil for non-residents; €10,000 for pan-EU digital services and goods OSS return. Intra-community acquisitions €10,000
Voluntary VAT registration No
VAT number format IT 12345678901
VAT Group  Yes - two optional types: liquidation group for sharing credits against group member liabilities. May include EU non-residents with an Italian VAT registration. Members retain their VAT numbers and obligation to file returns. Secondly, since 2018, regular group per VAT Directive since 2019 with single VAT identity. Excludes non-residents
Non-residents Similar to residents. There is extensive use of the reverse charge in Italy (see separate section) so limited cases where registration permitted e.g. intra-community supply or B2C supplies. Will have to request permission to be registered for intra-community supplies at the time of registration and inclusion on the VIES register
Fiscal Representative Non-EU businesses required to appoint a resident fiscal representative. Exception where EU mutual assistance agreement e.g. the UK and Norway
Digital Services Italy  participates in the EU single  One Stop Shop (OSS) VAT return for digital, telecoms and broadcast services. This was formerly the MOSS regime until 30 June 2021
Pre VAT registration costs Businesses may use their first annual VAT return to reclaim pre-registration costs directly related to the business
VAT Invoices Issuance See separate section on e-invoicing. Must be submitted within 12 days of tax point. Customers may report VAT paid if not issued with an invoice after four months. Not required for retail transactions unless requested by customer. Same for hotels and restaurants.
Content Date; unique sequential invoice number; name and address of supplier and customer; Customer VAT number for intra-community supplies or reverse charge; date of supply or advance payment if different from invoice date; Description, quantity or units etc of supply of goods or services; price per unit; taxable amount; VAT charged; rate (broken out if supplies at different rates); total; explanation if zero-rated supply; fiscal representative's details if applicable
E-invoices Italian SdI e-invoice obligations
Simplified invoices For transactions not exceeding €400. Excludes intra-community supplies. Details must still be submitted to SdI e-invoice regime
Self-billing Yes, by agreement between parties - need not be written. Third parties may also be made responsible for issuing invoices
Retention of invoices Five years after the end of the accounting period related to the invoice or similar ledger and supporting documentation. May be kept outside of Italy. Electronic archiving permitted under strict rules on integrity and security for at least eight years
FX rules May use other currencies, but VAT amount must be stated in € using European Central Bank rate prevailing
Invoice corrections Via credit notes with reference to the original invoice within 12 months or original invoice. Customers may request refund from tax office of incorrectly charged and paid VAT on their supplier invoices for up to two years previously
Compliance Right to deduct Excluded: food and drink; business gifts above €50; passenger transport; accommodation; 60% of car-related expenses
Call-off stock Following the EU's 2020 Quick Fix harmonisation reforms, stock may be transferred from an EU state to an customer location/warehouse in Italy without triggering a VAT registration and supply for a non-Italy supplier. Title has not passed until the customer takes the goods for production and sale. At which time a zero-rated transaction may be effected. This must happen within 12 months of the original movement
Reverse Charge - B2B Reverse charge applies on supplies by non-residents to any Italian established customer. Domestic reverse charge applies on supplies of: certain precious metals; computers mobile phones games consols; scrap; cleaning and demolition services; construction; labour intensive services
Cash discounts Supplier may reduce VAT by credit note if option taken. But not mandated
Bad debt relief If both parties agree, permitted at least 12 months after original invoice date. Supplies now only have to wait till start of court liquidation proceedings to seek bad debt relief
Import VAT deferment Not available
VAT warehouse Permitted for EU goods unless permission and other restrictions. Bonded warehouses for VAT and customs exemption also operated 
Supply & install
Use and enjoyment services Only applied on lease rentals of certain pleasure boats
Capital goods adjustment period Movable property: Five years. Immovable property: ten years
Non-residents VAT recovery EU businesses may apply for Italian VAT reclaims through the electronic portal of the tax authorities of their company of residency (8th Directive). Quarterly claims above €400 permitted, with final claim above €50 by 30 Sept of following year.  Non-EU businesses must submit a paper-reclaim with supporting invoices via the Italian authorities directly (13th Directive). This is only permitted if Italy  has a reciprocity agreement with home country of claimant. Non-EU businesses will have to appoint an Italian resident Fiscal Representative for the reclaim process
VAT on Digital Services Italy  follows the EU VAT on digital services regime, introduced in 2015. This includes participation in the One-Stop-Shop (OSS) single EU VAT return (formerly MOSS until 30 June 2021)
Live events
Distance selling threshold for goods Nil. Following the EU ecommerce VAT package reforms from 1 July 2021, local Italian VAT must be charged on all sales by non-Italian EU e-commerce sellers shipping from within the EU. Imported distance sales not exceeding €150 liable to Italian sales VAT with  IOSS return option
Cash accounting scheme Voluntary if sales do not exceed €2million per annum
VAT registered cash tills Italy VAT fiscal cash register rules
Statute of limitations Four years following tax year of submission of erroneous return; Five years for transactions
Other Italy operates a Split Payments regime for B2G transactions. This now includes listed public companies with a 70%+state ownership. This requires government customer to pay VAT element of supplier's invoice directly to tax authorities
VAT Returns Frequency Quarterly VAT communications if income does not exceed €700,000 goods or €400,000 services. In this case, quarterly VAT communications. Annual VAT return due sometime before end April of the following year.  Payments are however monthly (see below). Italy has started a 2021 pilot for pre-completed resident VAT returns based on SdI e-invoice data.
Filing method TARGET for payments
Deadlines (inc payments) For quarterly filings, the last day of the second month following the quarter end. 16th March for the final quarter communication. VAT payments are monthly, due by 16th of the month following the reporting month. For monthly filings, the end of the month following the reporting month end. Payments for monthly filers are also due by 16th of the month following the reporting month. Both quarterly and monthly filers must make an advance payment on their December VAT liability. This is due by 27th of December, and is generally 88% of the estimated VAT due.
VAT credits Quarterly refunds on application under strict rules. Will require a bank guarantee or statement from approved auditor if exceeding €30,000
Corrections VAT communications may be revised. Most adjustments are posted through the final, Annual Return. Adjustments must be included by five years following the report period end
Non-residents As per resident businesses. Exempted from live SdI e-invoicing. Non-EU businesses will require an Italian fiscal representative unless mutual assistance agreement in place e.g. the UK and Norway
Other filings Spesometro quarterly sales and purchase invoice listing due with quarterly/monthly VAT return. Esterometro quarterly reporting of intra-community invoices by the end of the following month; withdrawn from 2022 with extension of SdI e-invoice requirements. EC Sales Listing and Intrastat are combined in Italy. Intrastat ESL combined monthly by the 25th of the following month if above the quarterly sales reporting threshold in any one of previous four quarters: dispatches goods €50,000 ;  sales services €nil; acquisitions goods €200,000; purchases services €100,000.
SAF-T N/a
Penalties & interest Late VAT returns €2,000 to €5,000 fine. This is reduced by 50% if submitted within 15 days of the original deadline. There is a 30% fine for non-payment of any VAT due, which may be reduced once paid
B2C Distance Selling returns Italy participates in the One-Stop-Shop OSS pan-EU VAT return for distance selling, introduced in July 2021.

Leave a comment

Newsletter

Get our latest news right in your mailbox