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Italy, comes under the EU VAT regime, and is part of the European Union single market economy. VAT Directives are issued by the EU which lay out the principles of the VAT regime to be adopted by the members states. These Directives take precedent over the local legislation.
Click here for free guidance on Italian VAT registration and returns - including fiscal representation for importing or non-EU companies.
ITALIAN VAT Law
The Italian VAT law is contained within the specific VAT legislation and is backed up by case law from the Italian Tax Commission (Commissione Tributaria Provinciale). It is administered by the Ministry of Finance and the local tax offices.
ITALIAN VAT Registration
Foreign companies may register in Italy for VAT without the need to form a local company – known as non-resident VAT trading. There is no VAT threshold in Italy for the registration of non-resident traders – a VAT number must be in place before the commencement of taxable supplies.
There are strict rules on the situations where a registration is permitted. Common scenarios which require a Italian VAT registration include:
- Importing goods into Italy;
- Organising live events, conferences etc in Italy;
- 'Supply and install' services over 12 months;
- Selling goods from Italy to other EU countries; and
- Distance selling to private individuals in Italy, e.g. internet retailing.
Registering for Italian VAT generally takes 2-3 weeks, although this can vary.
Click here to read about the new rules on Italian VAT registration and the use of the reverse charge.
ITALIAN VAT Compliance
There are detailed rules controlling the recording and processing of Italian transactions. These include guidelines on:
- Italian invoice requirements, including dedicated invoice numbering;
- Foreign currency reporting and translation;
- Correcting errors from prior returns;
- Credit notes and corrections; and
- What accounting records must be maintained.
In Italy, there are strict rules on the layout and format of VAT records to be kept by companies or their tax agents.
ITALIAN VAT Rates
The standard VAT rate in Italy is 20%. There is a reduced rates of 10% and 4%.
There are many variations to the rates above, including exempt taxable supplies. Please contact us to learn more:
enquiries@tmf-vat.com
ITALIAN VAT Returns
Companies with an Italian VAT number must submit periodic payments. Generally, payments are submitted monthly in Italy. Italy has one of the harshest regimes for VAT non-compliance, and companies should ensure they are properly registered before they start trading.
There is also a requirement to submit two annual returns in Italy in the following year.
ITALIAN Intrastat
In addition to VAT returns in Italy, companies may be required to submit additional statistical information.
The Italian Intrastat, which lists sales (dispatches) and purchases (acquisitions), within the EU region, must be filed monthly once the annual threshold is exceeded.
ITALIAN VAT Refunds
If a foreign company is providing taxable supplies in Italy, but unable to obtain a Italian VAT number, or simply incurring Italian VAT on local goods or services, then Italian VAT may be recovered through a VAT reclaim.
From the 1st of January 2010, VAT refund applications are made through the Tax Authorities of the applicant’s home country.
For more details, click here to read about our VAT Recovery service.
To talk about our Italian VAT services, enquiries should contact TMF’s UK office, which co-ordinates TMF's European VAT services. TMF has offices in Milan and Rome as well as 35 other offices in Europe and 87 worldwide.
enquiries@tmf-vat.com
+44 (0)870 067 8881
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