Want to start a business in Italy? Be aware of your tax obligations to avoid unpleasant consequences. Check what the VAT rates are and how VAT registration in Italy works. In the article below you will find key information about VAT tax in Italy.
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VAT tax in Italy – VAT Registration
If you run a business and plan to offer products or services in Italy, you may be required to register for VAT. VAT registration in Italy applies to both EU and non-EU entrepreneurs.
VAT registration in Italy becomes necessary if your sales exceed a certain threshold. This threshold is known as the distance selling threshold. Currently, it is 10 000 EUR annually for EU-based entrepreneurs.
VAT tax in Italy – VAT Number
Every company registered for VAT in Italy receives an Italian VAT number. This number is essential for issuing VAT invoices, submitting declarations, and settling tax obligations. The Italian VAT number consists of the country prefix “IT” and 11 digits. It allows for the unique identification of the entrepreneur.
To obtain an Italian VAT number, you must submit a relevant application to the Italian tax agency. The original name of the institution is Agenzia delle Entrate. The VAT registration process can be complex. Many entrepreneurs opt to seek support from consulting firms. They provide support with registration and tax settlements.
VAT tax in Italy – VAT Rates
In Italy, there are four basic VAT rates in 2024.
It’s important to note that different VAT rates may apply depending on the type of goods and services you sell. Additionally, keep an eye on any changes in regulations that may occur during the tax year.
| Rate type | VAT rate | Products/Services |
| Standard | 22% | Most goods and services, including electronics, clothing, household appliances |
| Reduced | 10% | Passenger transport, some hospitality services, selected groceries |
| Super-reduced | 5% | Certain food products, cultural services |
| Zero | 0% | Exporting goods outside the EU |
VAT tax in Italy – VAT Declarations
After registering as a VAT taxpayer in Italy, you will be required to submit VAT declarations. Depending on your turnover and business type, you may submit declarations monthly or quarterly.
- Monthly declarations mainly concern enterprises with high turnover.
- Quarterly declarations can be submitted by smaller companies that meet certain criteria.
Remember that late submission of VAT declarations can result in financial penalties. To avoid errors and delays, many entrepreneurs choose to outsource accounting services.
VAT tax in Italy – How to Submit VAT Declarations?
VAT declarations in Italy are submitted electronically. You can do it through the Italian tax agency’s portal. You can submit declarations by the 16th day of the month following the end of the reporting period. Depending on the type of declaration, additional documents may be required. For example sales reports or purchase invoices.
VAT tax in Italy – VAT Deductions
Entrepreneurs can deduct VAT charged on purchases related to business activities. To exercise this right, you must have valid purchase invoices. They must show the seller’s Italian VAT number. It’s important to note that VAT deduction is not always possible in the full amount. It depends on factors such as the type of goods and services and the regulations in force at the time.
VAT tax in Italy – Summary
VAT tax in Italy is an important aspect of doing business in the country. Entrepreneurs must remember about the obligation to register VAT in Italy and submit declarations. It is also crucial to follow changes in VAT rates that may affect the prices of goods and services. It is advisable to stay updated on regulations and consult tax advisors to avoid tax settlement issues.
If you need support with VAT registration or tax settlements in Italy, contact us. Our experts offer professional advice and comprehensive services for VAT settlements in Italy. Visit our website to learn more!
FAQ – Questions and answers on topic: VAT tax in Italy
What are the VAT rates in Italy in 2024?
In 2024, the following rates apply in Italy: 22% (standard), 10% (reduced), 5% (super reduced) and 0% (zero rate).
When do I need to register for VAT in Italy?
You must register if you exceed the distance sales threshold of 10 000 € per year.
What is the VAT registration process in Italy?
The VAT registration process requires you to apply to an Italian tax agency and obtain a VAT number. It is worth using the help of consulting companies.
How do I get an Italian VAT number?
You will receive an Italian VAT number once you have registered your business to VAT. It consists of the prefix “IT” and 11 digits.
How often do I have to file VAT returns in Italy?
VAT returns are submitted monthly or quarterly. It depends on the turnover and the type of business.
Can I deduct VAT in Italy?
Yes, you can deduct VAT on business-related purchases if you have valid invoices.
Can I avoid the penalty for late submission of the VAT return?
To avoid the penalty, VAT returns must be submitted on time. The deadline is the 16th day of the month following the end of the settlement period.
What products are subject to zero VAT in Italy?
The zero VAT rate applies e.g. to the export of goods outside the European Union.
Can I sell products to Italy without registering for VAT?
Yes, but only until you exceed the sales threshold of 10 000 EUR annually.
Can VAT rates change during the year?
Yes, the Italian government can make changes to VAT rates, so it is worth keeping an eye on the regulations.