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Italy Delays VAT Increase to Fight Youth Unemployment


The Italian government has delayed a VAT hike for three months and passed tax breaks for organizations that hire jobless youth, in order to combat the 40% unemployment rate among young people. The country’s main VAT rate of 21% was scheduled to increase by 1% but the hike is now delayed from July to October.

According to Prime Minister Enrico Letta, the total value of the new measures (the tax delay and the tax breaks) is an estimated 2.5 billion euros ($3.3 billion).

While the government has not yet released financing details for the new measures, they will utilize EU structural funds and may also use revenue from a new tax on electronic cigarettes. Italian Economy Minister Fabrizio Saccomanni emphasized that Italy remains committed to keeping its deficit below the EU ceiling of 3% this year.

The government aims to create 100,000 new jobs with the tax relief. The measures, though effective immediately, must be approved by parliament in the next 60 days.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Will Frei
Avalara Author Will Frei
Will Frei covers sales tax news including best practices, legislation and sales tax technology. He is the Social Media Manager at Avalara.