Italian VAT

VAT in Italy: A Comprehensive Guide for Businesses |Eurofiscalis 

This comprehensive guide explains VAT in Italy and covers key topics such as VAT declarations, taxable transactions, and the VAT rate in Italy (22% standard, 10%, 5%, and 4% reduced rates). It also explains the reverse charge mechanism, deferred import VAT, INTRASTAT declarations, and distance selling rules under the OSS scheme. Additionally, the guide highlights VAT refunds, penalties for non-compliance, and industry-specific VAT regulations, while showcasing Eurofiscalis‘ VAT services to help businesses with VAT registration, filing VAT declarations, and ensuring compliance in Italy.

Published on : 13/02/2025
Reading time : 20 min
Article updated on : 13/02/2025

Understanding Italian VAT: Is your business compliant?

What do you need to know about the Italian VAT? If you conduct business in Italy, make sure to check whether your transactions are subject to VAT in Italy. Due to strict regulations (e.g., no possibility of retroactive registration), we recommend that our clients analyze their situation. You can take advantage of a free consultation – contact us through the form or call us.

In agreement with our Italian branch, we will assess your situation and assist you with the formalities related to VAT registration in Italy. We will file your declarations and represent you before the Italian office: Revenue Agency

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Reading Time : 10 min
02/13/2025

Are you interested in the topic “VAT in Italy”? Read on or take advantage of a free consultation.

VAT Rates in Italy

Understanding VAT rates in Italy: standard, reduced & super-reduced

Understanding the VAT rate in Italy is crucial for businesses operating in the country. In Italy, there are currently four VAT rates in effect:

22% the standard VAT rate. It applies to most goods and services that are not subject to a reduced VAT rate.

10% reduced tax rate applies, among others, to:

Water reserves

Some pharmaceutical products

Passenger transport

Admission to cultural events

Accommodation in a hotel

Restaurant and catering services

Admission to some sporting events

Some food products

Firewood

Energy products excluding thermal energy

5% second reduced tax rate. It applies, among others, to:

Some food products

Some social services

Some types of passenger transport

4% super-reduced tax rate. It applies, among others, to:

Some food products

Medical equipment for people with disabilities

Books, newspapers, some magazines

The 0% VAT rate in Italy applies to intra-community and international transport, as well as medical care.

How to register for VAT in Italy?

There are several cases in which VAT registration in Italy is mandatory. This primarily concerns companies that want to conduct taxable activities in Italy but do not have their registered office there. After registering for VAT, these enterprises gain almost the same rights as local Italian companies.

You must register for VAT in Italy as soon as the first delivery of goods or services is planned in this country. All transactions made before the moment of VAT registration will be settled in the first declaration immediately after registration.

Do you want to register for VAT in Italy?

Check out our dedicated page:

How long do You have to wait for a VAT number in Italy?

For a VAT number in Italy, you should expect around 30-45 days. To this, you should also add the time needed to gather the necessary documentation that must be submitted to the Italian tax office.

If you are interested in registering an Italian VAT number, please contact us. After signing the contract, we will provide you with the entire list of documents that need to be collected and translated, and we will also assist you throughout the entire procedure.

VAT declarations in Italy: deadlines, requirements & how to file?

In Italy, declarations are submitted on a monthly basis. Payment of the tax and submission of the declaration must occur no later than the 16th day of the month following the settlement month.

If the regularization of previous periods is being carried out, both the penalties (“ravvedimento LIPE“) and the interest must be calculated independently and paid along with the overdue tax. An annual summary declaration is also required. It must be submitted no later than April 30 of the year following the reporting year.

In addition to mandatory declarations, which are usually submitted on a monthly and annual basis, quarterly basis declarations are also submitted, regardless of the frequency of VAT declarations.

In justified cases, it is possible to establish a quarterly reporting rhythm in Italy. The office will make an individual decision in this matter and inform the taxpayer of the outcome.

When do You need to register for VAT in Italy?

Below we present some of the transactions that require VAT registration in Italy:

Import of goods to Italy

Export of goods from Italy

Intra-Community acquisitions of goods (ICA)

Intra-Community supply of goods (ICS)

Storage of goods in Italy and their sale

Movements of goods from Italy to other EU countries

Purchase of goods, followed by their resale in Italy (local sale)

Exceeding INTRASTAT thresholds – Import: €0; Export: monthly – more than €350,000 (data as of 01.01.2025)

Organization of cultural events in Italy and charging an entrance fee

What is the difference between the main establishment/permanent headquarters of a company and a branch?

Main plant / company headquarters: the main business activities of the enterprise are conducted there.

Additional establishment / branch of the company: a geographically individualized location of the enterprise (offices, workshops, etc.) conducting activities independently and continuously, but remaining legally linked to the company.

Do you need an answer on your questions? Contact us!

You can book a free consultation with our VAT experts in time that is suitable for you!

The Reverse Charge Mechanism for VAT in Italy: What businesses need to know?

In a situation where a supplier of goods or services, not having a registered office in Italy, sells goods to a VAT-registered company in that country, the reverse charge procedure must be applied for tax settlement. In such a case, the VAT is settled by the buyer, and the seller does not charge VAT on the sales invoice. This procedure is more commonly known as reverse charge in Italy.

Italy stands out in that every single delivery of goods must be based on the reverse charge mechanism.

Reverse charge, or the reverse charge mechanism, stands out in Italy compared to other European Union countries due to its specific application and scope. Italian regulations cover a wide range of services and goods that fall under this mechanism, aiming to combat tax fraud.

Key aspects include:

These diverse applications make Italy one of the countries with the broadest and most complex regulations regarding reverse charge in the EU.

Invoice in Italy

What information must be on the invoice?

Check if you include all the items listed below on your Italian sales invoices. If any item is missing – you need to correct the invoice in Italy. This is important primarily from the perspective of a potential tax audit.

Seller’s information – name, address, VAT number

Recipient’s data – name, address, VAT number

Invoice number

Date of document issuance

Delivery date of the goods

Metric: Description of delivered goods, quantity/weight,

Metrics: Net amount, VAT amount, gross amount

Applied VAT rate

If a 0% VAT rate was applied – a note regarding the provision exempting from VAT (along with the directive number)

If reverse charge was applied – a note on the regulations regarding VAT exemption (along with the directive number)

Currency in which the invoice was issued

VAT refund in Italy

Deadlines and rules

Regardless of whether your company is based in the European Union, in several cases there is a possibility to claim a refund of VAT paid in Italy (the surplus resulting from purchase transactions). Contact us to find out in which cases (for which specific purchases) you can obtain a VAT refund in Italy. We will gladly handle the VAT refund procedure on your behalf.

VAT refunds in Italy are only possible on the condition that the purchases made are directly related to business activities conducted in the country. Proof of this must be provided by invoices and other documentation (e.g., orders, contracts).

Key Information:

Who can apply for a VAT refund?

Companies with an active VAT number in Italy.

Taxpayers without a permanent establishment in Italy, but registered for VAT in their own country.

Requirements and procedures

To submit an application, it is necessary:

Filing a quarterly or annual VAT return.
Requesting a refund of the minimum amount of €400 quarterly or €50 annually.

Reasoning process

Filing VAT returns: Quarterly or annual.
Refund request: It must include all necessary information, including company details, VAT numbers, transaction details.
Tax audit: Often conducted before granting a refund.

Bank guarantee

In the case of refund requests exceeding €30,000, a bank guarantee is required as collateral.

Important deadlines

– Quarterly applications are submitted in the month following the accounting quarter.
– Annual applications are submitted from January 1 to September 30 of the following year.

Tax representative services

Companies can use the services of tax representatives who assist in the registration process, filing declarations and VAT returns, and represent them before the Italian tax authorities.

Do you need an answer on your questions? Contact us!

You can book a free consultation with our VAT experts in time that is suitable for you!

VAT penalties in Italy: avoiding fines and ensuring compliance

In Italy, the following penalties related to VAT apply:

Delay in VAT payment: If a company delays in paying VAT, the penalty is 30% of the overdue tax amount. Moreover, interest is charged at a rate of 2.5% per year.

Failure to submit the declaration on time: In the case of failing to submit the VAT declaration by the deadline, companies must expect a fine of €25 if the declaration is submitted within 90 days of the deadline.
- If the delay exceeds 90 days, the penalty is €248 plus up to 240% of the due VAT

INTRASTAT declarations in Italy: requirements and deadlines

In the event of exceeding the thresholds for the import and export of goods, sellers are also required to submit INTRASTAT declarations in Italy.

In 2025, the export threshold was set at €0, and the import threshold at €350,000

It is the obligation of every taxpayer who exceeds the established export or import threshold in Italy for the given year to register with INTRASTAT and report the transfer of goods.

In the event of failing to fulfill their obligations, the administration imposes penalties on taxpayers. The INTRASTAT declaration in Italy must be submitted by the 25th day of the month following the reporting period.

Distance selling and VAT in Italy

Since July 2021, it has been possible to settle distance sales to European Union countries through the One Stop Shop (OSS) procedure. Online sales, e-commerce sales no longer require VAT registration after exceeding the thresholds. Entrepreneurs can still choose how they want to settle their sales.

If the sale is conducted only in Italy, the seller has the option to register for VAT in that country after exceeding the sales threshold of €10,000 (this is a total limit for all EU countries). Then they can apply Italian VAT rates, Italian tax rules, and settle directly in Italy.

However, if sales are made to several EU countries, a simpler and more cost-effective solution is to use the EU One Stop Shop (OSS) procedure. Eurofiscalis offers settlements in this area and submits hundreds of OSS declarations on a quarterly basis.

VAT in Italy - Our Italian branch provides the following services:

Zosia Kumorek

Zosia is a marketing specialist in Eurofiscalis, a company with a well-established position in the field of cross-border VAT compliance. Simultaneously, Zosia continues her academic development as a master’s student in Finance and Accounting, which enables her to stay up-to-date with evolving tax regulations.

Combining her knowledge of marketing with a deep understanding of finance and taxes, creates precise, substantive, and easily accessible content. Her mission is to educate in understanding the complexities of taxation related to doing business in international markets.

With her commitment, Zosia translates complex tax issues into clear language, providing valuable information that genuinely helps companies in their development and international expansion. She aims for tax information to be not only understandable but, above all, helpful in making business decisions.