Italy avoids 24% VAT
- Oct 13, 2016 | Richard Asquith
Italy is presenting a draft 2017 budget which excludes a promised 2% VAT rise from 22% to 24%. In 2015, Italy committed to raising its VAT rate in 2017 if it failed to meet deficit reduction targets.
Instead, the government hopes to renegotiate the stringent terms of its Euro-currency membership and avoid further extensive austerity measures. The European Commission is pushing Italy to reduce its deficit below 2.4% of GDP. Originally, the plan was to hit 1.1%. The Commission is anxious that Italy reduces its debt mountain, which is now over 130% of GDP – one of the world’s largest.
Italy is to hold a key constitutional referendum in December, and will not want to put forward highly unpopular tax rises. There are no firm commitments given as to how Italy will meet the €15bn shortfall the VAT rise would have brought it.
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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