VAT in Italy – a complete guide. Rates and registration thresholds | VAT in Europe #6

The Value Added Tax (VAT), locally known as Imposta sul Valore Aggiunto (IVA), was introduced in 1972. Being part of the Italian system means following their VAT in Italy rules and regularly filing VAT declarations.

Should you register for VAT in ItalyT?

Non-Italian entities supplying goods (and to a lesser extent, services) may need to register with the Italian tax office for VAT in certain situations, including:

• import of goods into Italy (however, if the customer is previously registered as an Italian VAT payer, the supplier may not charge local VAT),
• buying and selling transactions of goods within Italy when the supplier and customer are not Italian businesses previously registered as VAT payers (reverse charge principle),
• consignment of goods in Italian warehouses for the purpose of fulfilling deliveries within Italy (or in other EU countries),
• charging entrance fees for events, exhibitions, or live conferences,
• online transactions as part of e-commerce with Italian consumers after reaching a sales limit of 10,000 euros.

What are the Italian VAT registration thresholds?

Just like in most European Union countries, there is no VAT registration threshold in Italy for businesses that are not local tax residents. However, if VAT registration is necessary (as mentioned above), it must be done before starting to provide relevant services or sell specific goods.

How to register for VAT?

Non-resident entities that need to register for VAT in Italy can choose one of the following options:

• choose to appoint a tax representative in Italy with an Italian VAT number. The appointment must be documented in an official or registered private document or a letter filed with the tax office based on the representative’s residence.
• register directly (independently) for VAT purposes in Italy, obtaining an Italian VAT number.

To get a VAT identification number, fill out and submit the “Declaration of Commencement, Change of Data, or Termination of Activity.” The Italian Revenue Agency (Agenzia delle Entrate) will then provide the VAT number.

The information to be provided in the declaration includes:

• identification details,
• ATECO code – it should be obtained from the table of economic activity codes: Ateco 2007 Classification of Economic Activities,
• business location.

The specific form and submission procedure vary depending on the type of entity.

Maintaining VAT records

Compulsory VAT records include:

• record of issued invoices,
• record of purchases.

Entities using general (businesses) or chronological (professionals) ledgers can skip VAT record-keeping if they include the same information in other records.

In the record of issued invoices, the entrepreneur must list all invoices and include the following details for each:

• invoice number,
• date of issue,
• customer details,
• taxable amount and VAT amount.

It is also necessary to maintain other documentation, such as a record of self-billing invoices for purchases from non-resident entities.

Alternatively, there is the possibility of maintaining collective records, i.e., a single register of invoices below 300 EUR each, issued in one calendar month.

Paying VAT

Individuals with a VAT number must calculate and pay VAT every month or, in some cases, every quarter, using the F24 form, which must be filled out and submitted online.

Most taxpayers are required to submit monthly declarations.

Every month by the 16th, taxpayers are required to calculate the difference between the output tax (VAT on sales) and the input tax (VAT on recoverable purchases) for the preceding months. After calculating the balance of VAT due, they must use the online F24 form to submit the VAT payment.

Taxpayers with an annual turnover less than 400,000 euros from services or 700,000 euros from other activities, or those belonging to specific categories, may choose to submit quarterly VAT declarations.

These entities submit their VAT declaration and pay the due VAT for the first three quarters of the calendar year by the 16th day of the second month following each quarter; the VAT declaration for the fourth and final quarter must be filed by March 16 of the following year. For quarterly payments, a 1% interest rate is added to the due VAT. Payments should be made online using the F24 form.

VAT – annual payment

Taxpayers subject to VAT (i.e., entrepreneurs and self-employed individuals) who submit their annual VAT return must pay the due tax based on the filed declaration by no later than March 16.

Payments must be made using the F24 form exclusively online, provided that the amount exceeds 10.00 EUR.

The payment of VAT can be deferred until the deadline for payment of amounts due based on the tax return. In such a case, for each month or part of a month after March 16, an additional interest of 0.40% is charged.

Advance payment for VAT

Until December 27th of each year, all taxpayers are obligated to make an advance payment:

• on the VAT invoice for December, if they submit monthly VAT returns, or on
• the VAT invoice for the fourth quarter, if they submit quarterly VAT returns.

The advance payment can be calculated using historical, analytical, or forecasting methods. Some categories of taxpayers are exempt from the obligation to make an advance payment.

The advance payment for VAT must be paid online using the F24 form.

Taxpayers can deduct tax credits or contributions they are entitled to from the advance payment.

For quarterly taxpayers, the VAT advance payment is not subject to the 1% interest rate, unlike regular quarterly VAT payments.

VAT report

VAT taxpayers are obliged to provide accounting data summarizing periodic VAT declarations. This requirement does not apply to taxpayers who are not required to submit an annual VAT return or make periodic VAT payments if the exemption conditions are met throughout the entire year.

The completed report on periodic VAT declarations (Comunicazione delle liquidazioni periodiche IVA) must be submitted quarterly. This form should be electronically submitted directly by the taxpayer or through an authorized agent by the last day of the second month following each quarter.

Registration in One Stop Shop (OSS)

The One-Stop-Shop (OSS) is an optional VAT system that allows taxpayers to fulfill their VAT obligations for certain transactions electronically in one EU country. The programs apply exclusively to the supply of goods and services to end consumers (private individuals) in the EU.

VAT in Italy

RATE	TYPE	TYPE OF GOODS OR SERVICES
22%	standard	all goods and services not covered by the lower VAT rate.
10%	reduced	some food products, water supply, certain pharmaceutical products, domestic passenger transportation, admission to cultural events, some social housing, repairs and maintenance of private residential buildings, certain construction work related to new buildings, certain supplies of new (non-luxury) buildings, some agricultural supplies, accommodation in hotels, admission to certain sporting events, energy products (excluding thermal energy), waste collection from households, alcoholic beverages in bars and cafes, takeaway food, cut flowers and cut plants for decorative purposes and food production.
5%	reduced	some food products, some social services, some types of passenger transportation,
4%	reduced	some food products, some types of medical equipment for people with disabilities, some books, newspapers and some magazines, electronic books with an International Standard Book Number (ISBN), online journals, some social housing, some agricultural products, some social services, motor vehicles for people with disabilities, construction works related to new buildings (in the case of the first dwelling), deliveries of new buildings (in the case of the first dwelling),
0%	zero	intra-community and international transportation.

Similar rates – at five levels – apply in Ireland and France. Read more about the VAT system in Ireland and VAT rates in France.

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