VAT in Italy - important information

VAT in European Union

Although the rules on VAT applicable in the European Union countries are standardized, it may happen that the practice of their application may differ in individual countries. And that is why it is worth knowing in detail the tax regulations regarding VAT in a given country, in this case — in Italy.

What is the VAT number in Italy?

In the case of Italian VAT, numbers are arranged not accidentally. The Italian VAT number, which is also the EU VAT number, is a series of eleven digits, preceded by two letters "IT", for Italy. The first seven digits are used to identify the taxpayer. The eighth and ninth digit correspond to the tax authority. And the last digit is a control number.

When do I need to receive a VAT number in Italy?

Another important point in addition to the Italian VAT numbers is the question of when to obtain such a VAT number. This is very important in order to register VAT before the start of the taxable activity. In Italy, there is no VAT threshold for non-registering an economic operator.

In what situations do I need to obtain a VAT number in Italy?

There is a VAT registration requirement when a trader imports goods into Italy, buys and sells goods in Italy, delivers or accepts intra-community deliveries, stores goods in a consignment warehouse in Italy, charges entrance fees to events or exhibitions in Italy, and when selling online to customers individual and when carrying out e-commerce transactions with Italian consumers.

What about e-commerce businesses?

The European e-commerce VAT package has been in force since 2021, which is to make easier the trade settlement in this dynamically developing sales channel. In this case, entrepreneurs must register for the VAT-OSS system — Value Added Tax - One-Stop-Shop. But only after exceeding €10,000 turnover. And all the taxpayers are required to submit quarterly VAT returns. The exception are companies when their revenues, depending on the business they run, will exceed €400,000 Euro or €700.000 a year.

VAT rates in Italy

The basic VAT rate in Italy is 22%. It includes products and services that are not eligible for the reduced rates of 10%, 5% and 4%, plus a zero rate.

Important changes to VAT from 2021

Since 1 January 2021, Italy has introduced a preferential tax rate of 5% for the sale of protective measures against COVID-19. The list of these products is set out in a government decree.

How to get support with VAT registration and accounting in Italy?

When running a business in the international enviroinment, in this case also in Italy, it is worth using the help and services of experienced tax advisors. There are companies outside the expensive Big Four that will efficiently and quickly help with all matters related to Italian VAT.