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How to Register for Italy Vat

December 1, 2022

Italy's Value Added Tax (IVA) was introduced in 1972, governed by Presidential Decree No. 633. This has ensured compliance with the European Union VAT directives and has allowed Italy to become one of the founding members of this body.

Italian VAT laws are based on court decisions. The tax authorities produce administrative doctrines, which state various VAT compliance rules. The Ministry of Finance oversees the system.

The current standard Italian VAT rate is set at 22% and VAT returns are filed quarterly as well as yearly.

Italian law requires all foreign entities to appoint a local fiscal representative to deal with the entities tax affairs. The fiscal representative is usually also the accountant and is jointly liable for the entities VAT debt. It is therefore not uncommon in Italy for the accountant to request a bank security deposit or a payment for fiscal representation.

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When are You Required to Register for Italian VAT?

In Italy, there are no VAT registration thresholds for businesses. Therefore if you are supplying taxable sale of goods in Italy, you will most likely need to register for VAT. There, however, some slight differences between foreign non-EU state companies and local Italian or EU State established companies.

Foreign Companies (Established in Non-EU State)

Foreign cross-border entities may require an Italian VAT registration if they engage in a number of different types of business activities. Such activities include:

  • Importing and storing goods in Italy.

  • Purchase and sale of goods in Italy

  • Trading goods between EU member states and Italy.

  • Buying and selling of goods inside the European Union (intra-community supply) between Italy and other member states (arrivals)

  • Online sales to customers in Italy

Please note, there is no registration threshold for foreign/cross-border businesses trading in Italy even if these businesses are VAT/GST/Tax registered in their country of establishment.

There is an exception where all sales are B2B. In the event that a foreign company's only Italian clients are other VAT registered businesses based in Italy, then it does not need to register for VAT in Italy. In the above scenario the Italian operator is responsible for paying any and all applicable VAT.

Companies established in Italy or EU territory

On the Italian territory, anybody who engages in a commercial, agricultural, creative, or professional activity on a regular basis must register for Italian VAT. 

For EU Established Companies that are already VAT registered in home state (or another EU State), a distance selling VAT Registration threshold does exist. Currently this EU-Wide Delivery Threshold is set at €10,000 per year collectively across all EU states. However, for Italy this threshold would only apply in a scenario where goods are NOT stored in Italy and are shipped to the end client from another EU State.

What are the Italian VAT rates and VAT filing times?

Like the rest of Europe, Italy has lowered its value-added tax rates on some types of products and services. When it comes to value-added tax, Italy offers the standard rate, reduced rates, and even a zero charge on several categories of goods and services.
 

  • Standard rate of 22%.
    This covers all goods and services that are not included in the reduced or zero rate.

  • Reduced rate of 10%. 
    Restaurant and hotel fare, takeout and delivery, and a few other food categories; public transit; home fuel and electricity; and a few specialty pharmaceuticals and medical gadgets, etc..

  • Reduced rate of 5%
    Services and goods targeted at certain populations, such as the elderly, persons with intellectual impairments, addicts, etc..

  • Reduced rate of 4%
    Foods, books, newspapers, and ebooks that are considered "basic", etc.

  • Zero 0% rate
    Supplies shared in the community (intra-community supplies) and Exports

 

For a full most up to date list of products covered by the above rates, please visit the official Italian tax authorities website.

When should you file VAT returns

In Italy VAT returns are usually filed quarterly. The submission deadline for the quarterly VAT returns is the last day of the second month after the reporting period. A holiday extension is anticipated for the second quarter VAT return.

An annual VAT returns is also required and must be filed by April 30 of the following year.

Any VAT that is owed for the December reporting period (in the case of monthly VAT payments) or the fourth quarter of the year (in the case of quarterly VAT payments) must be paid in advance by Italian taxpayers in the month of December.

How to Register for Italian VAT

If you need help registering for Italian VAT or are unsure whether you need to register for Italian VAT, please contact us for a free consultation.

Before we begin the registration procedure, it is crucial that you collect the necessary paperwork.

 

  • Certificate of Incorporation

  • Articles of Association and Memorandum of Association

  • Directors Passport Copy

  • Recent Company Utility bill / Bank Statement

  • Amazon.it Merchant code (amazon businesses only)

 

Please contact us if you have any questions; we will be happy to assist.
 

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