Italy brought in its Value Added Tax (VAT), known locally as Imposta sul Valore Aggiunto (IVA), regime in 1972. It has integrated the EU VAT Directives into local Spanish VAT Laws, created by the European Union, of which Italy is a founding member.
The Italian VAT rules are contained within the VAT Laws, and are backed up by case law. The tax authorities also issues Administrative Doctrines, which include various statements on day-to-day VAT compliance rules. The whole VAT system is overseen by the Ministry of Finance.
As with all EU countries, companies trading in Italy and supplying taxable goods or services, must comply with the Italian legislation. This included the obligations to register for Italian VAT, comply with the VAT rules and complete regular Italian VAT returns and other declarations.
Should you register for Italian VAT?
Where foreign, non-resident companies are providing goods, and to a lesser extent services, then it may face the requirement to register with the tax authorities as an Italian tax payer. The common situations where this is required includes:
Importing goods into Italy, although if the client is already Italian VAT registered then they supplier may not charge Italian VAT
- Buying and selling goods within Italy if the supplier and customers are not Italian company with a VAT registration (reverse charge applies).
- Provision or acceptance of intra-community supplies, or receipt of goods as acquisitions from other EU states.
- Sales to individual consumers over the internet, subject to the Italian distance selling registration threshold.
- Storing goods in a consignment warehouse in Italy for supplies in Italy or the rest of the EU.
- Charging admission fees to live events or exhibitions in Italy.
- E-commerce transactions with Italian consumers on the web.
Since the 2010 EU VAT Package, there are almost no circumstances where a non-resident VAT registration is required for providing services in Italy. Instead, the Italian customer records the transaction under the reverse charge mechanism.
Note that providers of electronic, broadcast or telecoms services to consumers in Italy only have to VAT register in one EU country under the MOSS scheme to file a single return covering all 27 member states.
If you would like to read details of the registration process, please see our Italian VAT Registrations, which also gives details of the VAT registration thresholds.
Need a fiscal representative in Italy?
Non-EU businesses selling in Italy will need to appoint a fiscal representative alongside completing VAT registration and returns.
Fiscal representatives are responsible for the accurate VAT submissions of their non-EU clients.
Avalara offers a Fiscal Representative Service as part of its international VAT and GST Registration and Returns Service.
Need help with your Italian VAT compliance?
Researching Italian VAT legislation is the first step to understanding your VAT compliance needs. Avalara has a range of solutions that can help your business depending on where and how you trade.
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- Italian VAT invoice requirements
- Italian VAT reverse charge
- Italy consignment call-off stock VAT
- Italian VAT recovery
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- Italian EC sales lists (ESL)
- Italian Spesometro Declaration
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- Italian SdI real-time e-invoices
- Fiscal representative in Italy
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