Key takeaways
- Reduced VAT rates introduced: Feminine hygiene products, baby items, and gas supplies now benefit from a reduced 5% VAT rate, while pellets are taxed at 10%.
- Temporary gas VAT reduction extended: The 5% VAT rate on gas and energy use remains in place until September 30, 2023.
- Stronger VAT compliance rules: Italy has tightened VAT registration checks and introduced stricter measures to prevent tax evasion, including new rules for online marketplaces.
In short: Italy's 2023 VAT changes cut the VAT rate to 5% on feminine hygiene products, baby products and face masks. Italy also kept a temporary 5% rate on gas until September 30, 2023, and cut the rate on pellets to 10%. New rules also tighten VAT compliance, registration checks and online marketplace liability.
Update (October 2026): Italy reversed part of these cuts from 1 January 2024. According to the Italian Ministry of Economy and Finance, the rate on feminine hygiene products, infant milk and baby diapers rose from 5% to 10%. Child car seats lost their reduced rate and returned to the standard 22%. The article below describes the 2023 position.
Italy made significant changes to its Value Added Tax (VAT) system in 2023. The changes aim to streamline tax processes, promote economic growth, and crack down on tax fraud and evasion. Here are the key highlights of the changes to VAT in Italy in 2023.
Which Italy VAT rates were reduced in 2023?
Italy cut the VAT rate to 5% on feminine hygiene products, baby products and face masks. Baby products include diapers, car seats and certain foodstuffs, such as powdered and liquid milk.
Italy has also extended its temporary VAT cut on gas for domestic and industrial use. The reduced 5% rate will continue to apply until September 30, 2023. It covers gas, district heating, energy produced from methane gas, and gas system charges.
The Italian VAT rate on pellet sales has been reduced to 10%, down from the standard rate of 22%.
What new laws strengthen Italy VAT compliance?
Italy has introduced new measures to fight tax evasion and increase VAT compliance. Stricter penalties and better monitoring systems help ensure businesses report and pay their Italy VAT correctly. In particular, there are now stronger checks if you apply for a new Italian VAT number.
The government has also acted against VAT fraud in online marketplaces. New measures hold online platforms accountable for VAT on transactions made through them. The aim is to ensure all VAT obligations are met, wherever the seller is based.
What do these changes mean for businesses?
If you sell these products in Italy, the rate you charge depends on the date of the sale. Check your product tax codes against the current rules:
- Feminine hygiene products, infant milk and baby diapers: 5% during 2023, 10% from 1 January 2024.
- Child car seats: 5% during 2023, standard 22% from 1 January 2024.
- Marketplace sales: online platforms can be held accountable for VAT on sales made through them, so keep your VAT details up to date with each platform.
- New VAT numbers: stronger checks apply, so make sure your application for an Italian VAT number is complete and accurate.
What VAT rates apply in Italy today?
Italy's standard VAT rate is 22%. Reduced rates of 10%, 5% and 4% apply to listed goods and services.
- 22%: the standard rate for goods and services without a reduced rate. Child car seats have been back in this band since 1 January 2024.
- 10%: listed items, such as electricity for listed uses and listed medicines. Feminine hygiene products, infant milk and baby diapers have been in this band since 1 January 2024.
- 5%: a narrow band. Decree-Law 113/2024 added winter sports courses, such as skiing, taught by instructors on official registers. It also added some sales of foals for non-food purposes.
- 4%: listed food, drinks and agricultural products.
The Italian Revenue Agency confirms the 22%, 10% and 4% rates. The 2024 changes come from the Ministry of Economy and Finance summary linked above.
How did the 2024 rate rise change prices?
The rate depends on the date of the sale. Take a pack of baby diapers sold for €20 before VAT:
- Sold in 2023: 5% VAT adds €1, for a total of €21.
- Sold from 1 January 2024: 10% VAT adds €2, for a total of €22.
For a child car seat sold for €150 before VAT, the VAT rose from €7.50 in 2023 to €33 from 2024. Update price lists and product tax codes so each invoice shows the rate for its date.
For current rates and registration rules, see our Italy VAT guide.
How Taxually handles this
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Frequently asked questions
What are the new reduced VAT rates in Italy?
Italy has lowered the VAT rate to 5% for feminine hygiene products, baby goods (such as diapers and car seats), and gas supplies. Additionally, pellet sales are now taxed at 10%, down from 22%. From 1 January 2024, the rate on feminine hygiene products, infant milk and diapers rose to 10%.
How is Italy improving VAT compliance in 2023?
The Italian government has introduced stricter VAT registration checks and tougher anti-fraud measures, particularly targeting online marketplaces to ensure that all sellers properly collect and remit VAT.
Is the 5% VAT rate on baby products still in force in Italy?
No. From 1 January 2024, infant milk and baby diapers are taxed at 10%, as are feminine hygiene products. Child car seats returned to the standard rate of 22%.
What is the standard VAT rate in Italy?
The standard VAT rate in Italy is 22%. Reduced rates, such as 10% and 5%, apply to specific goods and services.
Which goods are taxed at 4% VAT in Italy?
The 4% rate applies to listed food, drinks and agricultural products. Goods that are not on a reduced-rate list are taxed at the standard 22% rate.
Is the 5% VAT rate still used in Italy?
Yes, but for few items. Since Decree-Law 113/2024, it covers winter sports courses by registered instructors and some sales of foals for non-food purposes.
Do Italian VAT rates apply to online sales to Italian consumers?
Often, yes. Once your EU cross-border sales to consumers pass the €10,000 EU-wide threshold, VAT is due at Italian rates on sales to Italian customers. You can declare it through the One Stop Shop (OSS).
