VAT rates in Italy in 2024

The VAT tax, known in Italy as IVA (Imposta sul Valore Aggiunto), has been a key element of the Italian tax system since its introduction in 1972. In 2024, there are five different VAT rates in effect, varying depending on the type of goods and services. Understanding these rates and the associated regulations is essential for any entrepreneur conducting business in Italy. This article provides a detailed overview of the current VAT rates, explains which products and services are subject to these rates, and discusses the requirements for VAT invoices, registration procedures, and tax obligations. This information will help companies from e-commerce sector navigate the complex landscape of Italian tax law, avoiding potential penalties and sanctions.

IVA (VAT in Italy)

The VAT tax, known in Italy as IVA (Imposta sul Valore Aggiunto), was introduced in 1972. In 2024, there are five different VAT rates in Italy:

• 22% – the standard VAT rate, covering most goods and services not subject to reduced rates.
• 10% – the first reduced rate.
• 5% – the second reduced rate.
• 4% – the super reduced VAT rate.
• 0% – the zero rate.

Details of VAT rates in Italy

22% Rate
The standard VAT rate of 22% applies to all goods and services that do not qualify for lower rates.

10% Rate
The reduced 10% rate covers, among other things:

• Selected food items.
• Water supply.
• Certain pharmaceutical products.
• Domestic passenger transport.
• Admission to cultural and sporting events.
• Hotel accommodation, restaurants, and takeaway food.
• Hygiene products for women and baby products, such as car seats and diapers.

5% Rate
The reduced 5% rate applies to, among other things:

• Selected food items.
• Certain social services.
• Selected passenger transport services.
• Protective products against COVID-19.

4% Rate
The super reduced 4% rate covers, among other things:

• Selected food items.
• Medical devices for disabled people.
• Motor vehicles for disabled people.
• Selected books, newspapers, magazines, and e-books with ISBN.
• Television licenses.
• Certain social housing.
• Construction work on new buildings intended for first-time homes.

0% Rate
The zero VAT rate covers:

• Intra-community and international transport.
• Medical care.

VAT invoice requirements in Italy

VAT invoices in Italy must be issued on the day of the delivery of goods or within 15 days after the end of the month in which the delivery took place. These invoices must be kept for four years and include key information such as:

• Date of issue.
• Unique invoice number.
• Supplier’s VAT number.
• Full address of the supplier and the client.
• Description of goods or services delivered.
• Quantity of goods.
• Date of delivery, if different from the invoice date.
• Net value of the delivery.
• Applicable VAT rates.
• VAT amount broken down by rates.
• Reference to regulations under which VAT is not charged.
• Total gross amount of the invoice.

In some cases, the invoice should include details of the supplier’s tax representative. For transactions below 100 euros, a simplified invoice version can be provided.

VAT registration in Italy

There is no registration threshold for non-resident businesses in Italy, meaning registration must be completed before commencing taxable activities. Companies engaged in distance sales to Italy must register for VAT after exceeding the threshold of 10,000 EUR in sales under the EU VAT OSS (One-Stop-Shop) scheme. It should be noted that the obligation to register for VAT in Italy may arise not only from reaching a certain sales threshold, but also from other factors such as storing goods in Italy.

Documents required for VAT registration

To register for VAT in Italy, specific declarations such as Dichiarazione and Identificazione Diretta Ai Fini Iva Di Soggetto non residente are required. Non-EU businesses must appoint a tax representative and provide appropriate power of attorney.

VAT identification number

The Italian VAT number consists of 11 digits with the prefix IT, e.g., IT12345678901. The first 7 digits identify the taxpayer, the eighth and ninth correspond to the tax office, and the last digit is a check number.

VAT payer obligations

Taxpayers must submit quarterly VAT returns (Comunicazione Liquidazioni Periodiche IVA) and annual VAT returns by April 30th of the year following the reporting period. Failure to meet these obligations may result in fines and penalties.

Penalties and interest

For delays in paying the due VAT, a penalty of 30% of the outstanding tax is imposed, along with interest at a rate of 2.5% per year. In the case of delayed refunds, fines can exceed 240%.

Intrastat reporting in Italy

Entrepreneurs must file an Intrastat declaration if they exceeded specific transaction value thresholds in at least one of the four preceding quarters. These thresholds vary depending on the type of transaction:

• For imports (basic): 350,000 EUR for goods and 100,000 EUR for services.
• For exports (basic): 100,000 EUR.
• For imports and exports (detailed): 20 million EUR.

More information on Intrastat reporting in Italy can be found here: https://amavat.eu/intrastat-in-italy-guide-for-e-commerce-sellers-in-2024/.

Contact with the Italian Tax Authority

Agenzia delle Entrate:

• Address: Rome, via Cristoforo Colombo n. 426 C/D – 00145
• Website: Agenzia delle Entrate
• Phone: +39 0696668933

The Italian VAT system requires meticulous compliance with regulations to avoid penalties and sanctions. Registration and adherence to tax obligations are crucial for conducting business in this country.

Summary

The VAT system in Italy introduces five different tax rates, reflecting the variety of goods and services.E-commerce companies must not only be familiar with these rates but also strictly adhere to the procedures for VAT invoices and registration to avoid penalties and sanctions. Regular VAT return submissions and Intrastat reporting are key elements of conducting business in Italy. Understanding and complying with Italian tax regulations is fundamental for a stable business operation in this country.

If you have any questions or need additional information, we encourage you to contact our team of experts, who are ready to provide assistance and support: Contact us – amavat®.