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Introduction to VAT in Italy
Like other EU countries, Italy is obliged to comply with EU VAT regulations, but can establish its own VAT registration and declaration rules based on them. These regulations require the same for EU countries, including Italy. The Italian authorities have set its own VAT rates based on its own national circumstances.
Italian VAT Law
Subordinate to its proprietary VAT regulations, Italy's VAT law is supported and managed by the Italian Taxation Commission (Provincial Taxation Commission), and regulated by the Ministry of Finance and local tax offices.
Italian VAT registration
In Italy, foreign companies can register for VAT without a local entity, which is called non-resident VAT transaction. There is no registration threshold for non-resident merchants in Italy. The VAT number must be obtained before the start of taxable transactions.
Italy has strict legal regulations on VAT registration. The circumstances where VAT registration in Italy is required include:
Import items to Italy
Organize on-site activities, meetings, etc. in Italy
Provide more than 12 months of 'supply and installation' services
Provide goods from Italy to non-taxable individuals or companies without established business
Sell goods from Italy to other EU countries
Purchase goods from other EU countries
Remote sales of goods to individual consumers, such as online retail
Generally speaking, Italian VAT registration takes approximately 2 to 3 weeks, depending on the situation.
Italian VAT payment
In Italy, trade records have corresponding legal norms, which includes:
Requirements for Italian receipts, including dedicated receipt numbers
Foreign Exchange Statements and Translation
Correction of past reporting errors
Credit notes and change records
Accounting records must be saved
Italy has strict regulations regarding the design and format of VAT records for companies or their tax agents.
Italian VAT rate
The standard VAT rate in Italy is 22%. The VAT rate for medicine, passenger transportation, cultural and entertainment activities, as well as hotels and catering industry is 10%; The VAT rate for food, healthcare, books, and e-books is 4%. The above tax rates vary, including exemptions for taxable goods. Please contact us for more detailed information.
Italian VAT declaration
In Italy, companies with an Italian VAT registration number should make regular payments, usually on a monthly basis.
Italy is very strict on VAT declaration. Companies should ensure that the VAT registration has been completed correctly before starting the transaction. Italy requires two annual returns to be submitted within one year after registration.
Italy adopts the Intrastat
On the basis of Italian VAT declaration, companies may be required to provide additional data information. Within the EU, when a company's sales (scheduling) and purchases (acquisitions) within the EU exceed the annual limit, the list must be submitted on a monthly basis.
Italian VAT refund
If a foreign company sells goods in Italy but does not meet the standards for applying for a VAT registration number, or indirectly purchases products or services subject to taxation, the corresponding VAT is refundable.
The VAT refund application can be processed by the tax authorities in the country where the applicant is located.
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