Italian VAT returns
Once registered for VAT, businesses must declare any taxable transactions and pay over any VAT due. From the start of 2017, Italy underwent a wholesale reform of its reporting regime. Previously, only monthly payments were required, with an annual VAT return due the following year were required. From 2017, quarterly VAT returns and invoice listings are required, too. Annual returns are still required. Below are details of the new regime, including interim measures for 2017 filings.
How often are Italian VAT returns required?
VAT Returns deadline
All tax payers must file a quarterly VAT return, Comunicazione Liquidazioni Periodiche IVA. This is due on the last day of the second month following the reporting quarter end. For example, Q1 VAT return deadline is 31 May. The first filing for 2017 was delayed until 12 June.
Invoice listing deadline
In addition to the quarterly VAT return, a quarterly invoice listing, Spesometro, is also due. This has replaced the previously annual Spesometro submission of sales and purchase invoices. The filing deadline is the same as the quarterly VAT return. The first filing for 2017 covers Q1 and Q2 and is due mid-September.
Annual VAT return deadline
An annual VAT return is still required, and the reporting deadline is the 30 April of the year following the reporting deadline.
Returns should be based on the accounting records kept to exacting Italian accounting and tax standards. These records are known as the Italian Register.
Tax payers with an annual turnover above €700,000 must remit any VAT due each month. Businesses below this amount can opt to pay quarterly, but must pay a 1% non-refundable surcharge.
What Italian VAT can be deducted?
As well as declaring the Italian VAT on any sales, the VAT return also lists VAT on purchases (inputs) that can be offset against the sales VAT due. This included import VAT. Non-resident companies are allowed to reclaim such input VAT on the same basis as any resident company. Examples of VAT deductions include:
- Conferences and seminars
- 50% of parking costs
- Business entertainment are not allowable
- Import VAT
- VAT on the purchase of goods for resale
- VAT on capital expenditure
Where are Italian VAT returns filed?
Returns are posted online. Any payments can be made through the Target system.
Italian VAT penalties
The penalty for late payment of any Italian VAT due is 30% of the VAT. In addition, there is an interest charge of 2.5% per annum. If a return is late, the fines can reach over 240%.
How are Italian VAT credits recovered?
Where the Italian VAT inputs exceed the outputs, this surplus, or credit, is due back to the tax payer. Italy is one of the slowest repayers of VAT credits in Europe. Companies have to wait until the calendar year end before they can submit a claim for a refund. This can then be a long process, taking up to two years. In addition, the Italian tax authorities are increasingly asking for a two to three year bank guarantee for the amount of the credit.
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 registration
- Italian VAT returns
- Italian VAT rates and VAT compliance
- Italian VAT invoice requirements
- Italian VAT reverse charge
- Italy consignment call-off stock VAT
- Italian VAT recovery
- Italian intrastat
- Italian EC sales lists (ESL)
- Italian Spesometro Declaration
- Italian Esterometro Declaration
- Italian SdI real-time e-invoices
- Fiscal representative in Italy
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