Italian VAT rates and VAT compliance

Italian VAT rates

Whilst the EU sets the broad parameters for VAT rates, including setting the minimum standard VAT rate at 15%, Italy still sets most of the rates.

The current rates are:

Italian VAT rates

Rate Type Which goods or services
22% Standard All other taxable goods and services.
10% Reduced Some foodstuffs; water supplies; some pharmaceutical products; domestic passenger transport; admission to cultural events; some social housing; renovation and repair of private dwellings; some supplies and construction work for new buildings; some agricultural supplies; hotel accomodation; restaurants; admission to certain sports events; energy products (excluding district heating); firewood; collection of domestic waste; some waste water treatment; alcoholic beverages in bars and cafes; take away food; cut flowers and plants for decorative use and food production.
5% Reduced Some foodstuffs; some social services.
4% Reduced Some food products; certain medical equipment for disabled persons; certain books; newspapers and some periodicals; e-books with an international standard book number (ISBN) ; online journals newspapers; TV licence; some social housing; some agricultural supplies; certain social services; motor vehicles for the disabled; some supplies for new buildings; construction work on new buildings for first housing).
0% Zero Intra-community and international transport.

Italian VAT Compliance

There are strict rules for companies who have received an Italian VAT registrations.  These mirror the EU’s VAT Directive, and include

  • Basic information required for Italian VAT invoices.
  • Process and approvals for the use of e-invoices, including compliance and control procedures with the signature and authenticity of an invoices.
  • Preparation of bookkeeping records, known as VAT Registers in Italy.  Accounting data must be retained for
  • Correct invoicing of customers for goods or services in accordance with the Italian time of supply VAT rules.
  • Treatment for credit notes and other corrections.
  • Use of approved foreign currency rates.

What is the tax point for Italian VAT?

It is important to determine the correct time for determining when the supply is made.  This is known as the tax point or time of supply.  In Italy, or goods, it is considered as the point of transfer of title.  Any VAT due should then be declared in the subsequent VAT return.  The tax point for supplies is the date of payment or partial payment.  This is a deviation from the regular EU rules of the time of completion of the services.

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