VAT Italy Guide

Read our guide and find out everything you need to know about VAT in Italy, from registration to filing, and more.

Are you considering a business expansion into Italy? Then now is the perfect time to learn a little bit more about how the Italian VAT system works with our guide. Read on to find out about VAT laws and obligations when trading in Italy.

What is the Italian VAT rate?

Italian VAT (Value Added Tax) is known as Imposta sul Valore Aggiunto (IVA). The standard Italy VAT rate is 22%, but there are also two reduced rates of 10% and 5%, and a super reduced rate of 4%.

Type of VAT	VAT Rate	Applicable Goods/Services
Standard VAT	22%	All other taxable goods and services.
Reduced VAT rate	10%	Products and services include water supplies, pharmaceuticals, hotel accommodation, and restaurants.
Reduced VAT rate (2)	5%	Products and services include children’s products and certain foodstuffs.
Super Reduced VAT rate	4%	Includes certain foodstuffs, drinks, medical equipment for disabled persons, books, newspapers, and agricultural products.
Zero rate VAT	0%	Includes passenger transport, medical and dental care, and social services.

Registering for VAT in Italy

The VAT registration threshold for resident businesses in Italy is €85,000. That means any business exceeding this threshold must register for VAT.

From July 1, 2021, all EU member countries began operating under the same distance selling threshold of €10,000. So, if your company’s annual turnover for cross-border trade with an EU country exceeds €10,000, you will need to register for VAT in Italy. You will also have to register if you store products in Italy or participate in an FBA (Fulfilled-by-Amazon) program that includes Italy.

In order to receive an Italian VAT number in Italy, you must fill out and submit a "Declaration of Commencement, Change of Data, or Cessation of Activity" to the Italian Revenue Agency (Agenzia delle Entra). The Declaration must include identification information as well as the sort of activity to be pursued and the location of the business.

Fiscal representation in Italy

It should be noted that non-EU companies selling in Italy will be required to appoint a fiscal representative, who will be jointly liable for the Italian VAT.

Italian VAT return filing and penalties

In Italy, VAT returns must be filed online on a quarterly basis using the Italian Target System via the Comunicazione Liquidazioni Periodiche IVA. Annual returns are compulsory for all companies registered for Italian VAT.

Quarterly VAT returns are due on the last day of each month following the previous tax period, while for annual returns you need to file by April 30th. The VAT due must be paid every month, although businesses with a turnover of €700,000 or less can opt to pay quarterly if they agree to pay a 1% non-refundable surcharge.

The penalty for late filing in Italy is €25 if submitted within 90 days of the deadline and €248 plus up to 240% of the VAT due if after the 90 days. For late payment of Italian VAT, the fine is 30% of the VAT due with 2.5% of interest added every year.

Italian Intrastat declarations

In Italy, both resident and non-resident businesses are required to submit Intrastat returns. The annual threshold for filing an Intrastat return for arrivals is €200,000 with submissions to be made monthly. For dispatches below €50,000, submissions are quarterly, whereas if the threshold exceeds €50,000, submissions must be made monthly.

Reverse charge in Italy

Designed to reduce the need for companies trading across Europe to VAT register, the reverse charge mechanism shifts the responsibility for reporting and paying VAT from the supplier to the recipient of goods or services. In Italy, the reverse charge applies to transactions involving EU cross-border supplies as well as specific industries.

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