For any purchase or transaction carried in Italy a VAT tax is applied.
The IVA, VAT in Italian, is around 22% but it can vary according to the goods or services you buy. For all the info about this tax, read our article aboutsales tax in Italy.
The sales tax in Italy or VAT, is called IVA (Imposta sul valore aggiunto) and it is 22% of any taxable sales, including raw materials.
All businesses must collect this Value Added Tax on behalf of the government, pay it quarterly or monthly (depending on the annual VAT turnover) and file the quarterly VAT return.
The European Council Directive 2000/65/EC allows the VAT direct registration for any European based trading company wishing to sell products or services in a foreign EU country to individuals and other private entities.
This service is particularly useful for companies wishing to sell on e-commerce platforms across Europe.
The VAT direct registration allows the foreign entity to avoid a local Permanent Establishment and any income tax in the local country.
After moving back to Italy from the United States in 2013, I realized how much an accounting and tax firm was needed to help expats living in Italy to comply with the local tax regulations.