VAT in Italy
This section serves as a guide for e-commerce sellers in Europe who are planning to extend their business activities to Italy. It provides all you need to know about VAT (Value Added Tax) system, including details on registration, international VAT compliance, and the various VAT rates that apply to different categories of goods and services.
Italian VAT rates for different categories
Italy has a set of VAT rates that apply to various goods and services. VAT-registered businesses in Italy must apply these rates appropriately and account for the collected tax. The standard rate, reduced rate and super-reduced rates are as follows:
Rate | Type | Goods/Services |
22% | Standard vat rate | Most goods and services fall under the standard VAT rate. |
10% | Reduced vat rate | This rate applies to certain foodstuffs, some pharmaceutical products, admission to cultural and entertainment events, and accommodation. |
5% | Reduced vat rate | Specific items like books, certain medical equipment, and some social services. |
4% | Super-reduced vat rate | Essential goods, including basic foodstuffs, and some medical supplies. |
0% | Zero rate | Intra-community and international transport services, and exports outside the EU are zero-rated, allowing for reclaiming of input VAT. |
For a detailed list of VAT rates in Italy per item, refer to the Agenzia delle Entrate (Italian Revenue Agency).
VAT filings & Registrations (VAT compliance)
Register for VAT in Italy
When starting or expanding e-commerce activities in Italy, VAT registration is a critical step. Here’s the process for obtaining an Italian VAT registration:
Application Submission: E-commerce sellers can register for Italian VAT with the Italian tax authorities (Agenzia delle Entrate) either directly or through an intermediary.
Documentation: Provide the necessary documentation, which could include a certificate of incorporation, evidence of trade, and identification documents.
VAT Number: That’s it, you’re registered in Italy! Upon approval, you will receive an Italian VAT number (Partita IVA).
Italian VAT Returns & VAT Payment
VAT filings in Italy should be completed as per the prescribed schedule. Usually, you can pay vat on a quarterly basis, or on a monthly basis depending on the business operations. The VAT return must be submitted on or before 16th day of the month.
Electronic Filing: VAT returns are generally filed electronically using the Sistema di Interscambio (SdI) system.
Timely Submission: It’s important to file Italian VAT returns and make pay VAT promptly to avoid late filing penalties. The VAT payment must be done on or before the 16th of the month as well. This applies to both monthly and quarterly VAT returns.
Italy VAT Fines
Not adhering to Italian VAT rules can lead to various fines and penalties:
Infraction Type | Penalty Description | Fine Amount / Penalty |
Late Filing | Failure to file VAT returns on time | Fines ranging from €250 to €2,000 for each late submission. |
Late Payment | Delayed payment of VAT dues | Interest charged on the late payment plus additional penalties. |
Inaccurate Filing | Mistakes or omissions in VAT filings | Proportional fines based on the amount of VAT that is misstated. |
Tax Fraud | Deliberate underreporting or non-payment of VAT | Severe penalties including criminal charges, with fines based on the amount of tax evaded. |
How long do I need to keep records?
In Italy, businesses are required to maintain VAT records and invoices for ten years to comply with record-keeping obligations.
Italian VAT Thresholds
Italy has set a distance selling threshold of €35,000. Once sales exceed this threshold, VAT registration in Italy is required. Businesses may also opt for voluntary VAT registration before reaching the threshold.
To ensure compliance with EU VAT legislation, it’s recommended to consult the Agenzia delle Entrate’s
