Value added tax in Italy

The Italian government introduced Value Added Tax (also known as Value Added Tax) back in 1972, which is called Imposta sul Valore Aggiunto (IVA) in Italian. Italian officials have also decided to introduce the VAT directives and other initiatives of the European Union, of which Italy is one of the founding members.

Italian VAT regulations can be found in VAT laws and other legal acts, which are constantly backed up by precedents. The local tax office also develops and implements administrative doctrines containing various general guidelines for a day-to-day VAT application. The VAT system is overseen by the Italian Ministry of Finance.

According to the European Union's common VAT regulation, all companies trading on the territory of Italy and supplying taxable goods or services must comply with local tax laws. The latter include the obligation to apply for the local VAT number, to comply with all requirements of the Italian VAT regulations, and to regularly fill out and submit VAT reports and other declarations.

Cases where a company needs to register Italian VAT

In this case, when a foreign, non-resident company sells goods or provides services, it may be faced with the legal obligation to apply to the tax office like a local taxpayer and obtain an Italian VAT number. A company may be required to obtain an Italian VAT number under the following circumstances:

Importing goods into Italy, but if the customer has an Italian VAT number the supplier must not estimate local VAT;

Buying and trading goods in the territory of Italy, provided that the supplier and customers are non-Italian companies with a local VAT number;

Provision or receipt of intra-Community deliveries or receipt of goods as purchase from other member states of the European Union;

The sale of goods to individual consumers via the internet is subject to the local distance selling registration threshold;

Storage of goods in a consignment warehouse on the territory of Italy for the purpose of delivery in Italy or alternatively in the EU;

Collection of entrance and entry fees to live events or exhibitions on Italian territory;

E-commerce transactions where the goods are sold online to Italian consumers.

As of 2010, there are almost no situations where registration of a non-resident VAT number is required to provide services on the territory of Italy. Instead, the Italian customer records the transaction using the reverse charge method.

Remember that according to the MOSS system, providers of digital, broadcasting or telecommunications services aimed directly at Italian consumers only have to apply for a VAT number in one of the member states of the European Union in order to make a single declaration for all 28 to submit to Member States.

Basic information on Italian VAT

Below you will find basic information about Italian VAT.

Normal VAT rate: 22%

Reduced VAT rate: 4%, 10%

Distance selling registration threshold: 35,000

EU VAT number format: IT99999999999

VAT returns

Annual sales tax return and annual sales tax reporting must be filed with the local tax authority. There is no need to file monthly quarterly sales tax returns. The annual notification of VAT data only has to be submitted digitally in February. The annual sales tax return must be submitted digitally by September 31st and submitted together with the corporate tax return.