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:
|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 construction work on new buildings; some supplies of new buildings (non-luxurious); some agricultural supplies; hotel accommodation; 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; certain passenger transport|
|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; construction work on new buildings (for first housing); supplies of 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.
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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