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Company Formation Italy



VAT in Italy

Updated on Tuesday 12th December 2017

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VAT_in_italy.jpgVAT (Value Added Tax), known locally in Italy as Imposta sul Valore Aggiunto (IVA), was introduced in 1972 and has integrated the rules and directives set by the European Union, of which Italy if a founding members.

The VAT rules that Italy follows are contained within the VAT Law, while tax authorities issues administrative doctrines that include statements on the VAT compliance rules. The Ministry of Finance oversees the entire VAT System. The current VAT rate applied in Italy is 22 percent.

The Italian legislation states that any type of companies formed in Italy that are trading in Italy and supply taxable goods or services must follow specific steps, such as registration for the Italian VAT, complete regularly the Italian VAT return and other declarations and comply with the VAT rules.

What types of companies should register for VAT in Italy?

Non-resident companies that provide goods or services may be required to register with the Italian tax authorities as taxpayers. This is usually required if a company buys and sells goods within Italy and the supplier and customers are not Italian companies with VAT registration, if a company deals with provision or acceptance of intra-community suppliers, receipt of goods as acquisition from other EU States. On the list, there are also sales to individual customers using the internet, as they are subject to the Italian distance selling restoration threshold.


When it comes to European Union, if your company is in Italy and you want to run your business outside Italy, you need to ask for the “VAT identification” in a few EU countries.

An increase of the VAT rate took place in September 2013

Friday, September 27, 2013 was the day that marked the decision to raise the VAT tax rate from 21 percent to 22 percent, despite the expectations. Initially, the Italian government planed on raising the VAT rate starting October 1, 2013 until January 1, 2014.

Article 6 of the Italian VAT Decree provides reference to the tax point in order to ascertain the correct VAT rate. As such, if the tax rate occurred before October 1, 2013, the rate applied was of 21 percent. If the tax point was after October 1, then the 22 percent rate was applied.

Italy offers the possibility of VAT refund for visitors

Foreigners that visit Italy may receive a refund of the VAT tax paid on goods bought for deportation. In order to proceed with the refund, the visitor must present his passport, the receipts of the goods and a proof of the deportation of the goods to an Italian VAT refund station, usually found in airports, tourist offices or international travel hubs.

However, the VAT tax refunds are different by region; therefore, visitors should always check the terms and conditions of the Italian VAT refund. If you need more information on the VAT applied in Italy, our company formation agents in Italy can help you with any specific information. Contact us for assistance.



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