VAT in Italy

Local name of the tax: “Imposta sul valore aggiunto” (IVA).
Management of the tax by “Dipartimento delle Finanze” (www.finanze.it) and www.agenziaentrate.gov.it

VAT rates in Italy

• General rate: 22%
• Reduced rate: 10%
• Super reduced rate: 5% and 4%
• Zero rate and exempt

VAT number format

• IT 0 1 2 3 4 5 6 7 8 9 0 (11 Digits)

Frequency of filing VAT returns

• Annually, mandatory for all companies.
• Payment of monthly or quarterly VAT, based on the previous year’s turnover.
• Quarterly, companies must report the details of their VAT settlements, regardless of whether they have to pay their settlements on a monthly or quarterly basis.

Thresholds

• Registration: There is no threshold.
• Established taxpayers: There is no threshold.
• Non-established taxpayers: There is no threshold.
• Distance selling: From € 100,000.00 — (€ 10,000.00 from 1 July 2021).
• Services provided by electronic means (MOSS): € 10,000.00

VAT recovery for non-established businesses

Companies not established in Italy may recover VAT if a number of requirements are met.

In Italy there is no amount above which a company or business must register with the Italian Tax Agency. Therefore, any taxable person that carries out operations/transactions subject to VAT in Italy must register for VAT purposes in that country.

Registration for VAT purposes in Italy is generally required when one of the following situations occurs:

• Import of goods into Italy, unless the customer already has an Italian VAT number, then it may not be necessary to register and charge Italian VAT.
• The purchase and sale of goods within Italy if the seller and/or customers are not registered for VAT purposes in Italy (in this case the reverse charge mechanism is not applicable).
• Certain intra-Community acquisitions of goods from other EU Member States. Intra-Community deliveries from Italy to customers located in other EU countries.
• Distance selling to consumers located in Italy, via online, internet, catalogue, above the set thresholds (100,000 euros at present).
• Storage of goods/stock in Italy through warehouses or similar (Amazon Warehouses, for example).
• The collection of tickets for attendance and admission to live events, fairs, conferences that are held in Italian territory.

If you have any doubts as to whether or not you should register for VAT in Italy, do not hesitate to contact us and we will analyse your case.

VAT returns in Italy are normally annual. However, VAT is paid monthly or quarterly, depending on the taxpayer’s turnover, and data supporting payments made for the tax must be provided on a quarterly basis.

In any case, based on the form of the company/business, the possible returns to be filed in Italy are as follows:

If your company or business is not established in Italy and you plan to carry out transactions subject to Italian VAT, you must fill in the ANR/3 form for the purposes of registering for VAT and obtaining your Italian VAT number.

This form is only applicable to companies or businesses established in an EU country other than Italy or a third country that has a collaboration and mutual assistance agreement with Italy for VAT purposes.

Therefore, there are specific forms for companies established in the EU and others for companies established outside the EU. The application shall include the following documents:

• Copy of the passport or identity document of the applicant’s representative.
• Tax identification number of the applicant company.
• Certificate of registration in the Commercial Register in your own country of establishment, stating the validity of the company and the details of the representative.
• Certificate of being a VAT taxable person in your own country of establishment.
• Proof of your intention to carry out an activity subject to VAT.

Registration takes between 6 and 8 weeks if the application has been correctly submitted and there are no additional information or documentation requirements from the Italian Tax Agency. Once registration and the Italian VAT number have been obtained, the applicant will receive the necessary credentials to file its VAT returns and make payments online.

Companies/businesses established outside the EU, except in the case of agreements between countries, are required to appoint a tax representative in Italy to apply for registration and the Italian VAT number. The designation and appointment of the tax representative must be made by means of a power of attorney authorised/empowered to represent the non-established company before the Italian Tax Office.

Once your business is registered for VAT in Italy and has been assigned an Italian VAT number, your business is required to start complying with the local regulations in certain situations. This would mean:

• To issue invoices with the details required by Italian law.
• Electronic invoicing is permitted subject to agreement with the recipient in which the signature and authenticity of its contents are guaranteed.

If your company or business needs to register for VAT in Italy and be assigned an Italian VAT number, do not hesitate to contact our VATONTIME team. We will be more than happy to help you.