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 VAT tax in Italy has been increased in the last years, and the government was planning to increase it to 23%. Check out also our essential guide on VAT for business owners.
In the graph below you can see the variation of the sales tax in Italy since 2000.
Useful tips for tourists in Italy
Italy VAT refund: what you need to know
If you visit Italy and you purchase items for a value over 175 € from a certain shop, you may be able to get a VAT refund once you come back to your country.
You will need to:
If you do everything correctly you will receive a custom stamp for the items you purchased and you will get money at the refund station via cash and bank transfer.
Save the receipt with you
When you purchase from a shop, restaurant, or any other business in Italy, keep the receipt with you for some time, especially if you are in a touristy city; the finance police (guardia di finanza) has the power to stop you and fine both you and the shop-owner if you do not have the receipt on you.
Useful tips for resident in Italy
There are different types of VAT’s rate in Italy.
Paying VAT as a Business Owner
How to do it
If you have a VAT registered business you must submit and pay VAT returns and VAT ledgers every quarter. In general, any individual or legal entity that sells goods or services in Italy is liable for VAT.
If you are a business legally established in Italy or a permanent establishment of a foreign business in Italy, then you must register for VAT purposes sending the Form AA7/10 to the Tax Office (Agenzia delle Entrate), within 30 days from the start of your activities.
Only if you are an individual occasionally selling an item or providing a service in Italy you fall outside of the scope of VAT and you do not need to worry about VAT registration.
Some categories are exempted from paying IVA such as the freelancer in Italy in the so called "regime forfetario" and the workers in "regime dei minimi agricolo".
Lastly, if you are non-resident, and you sell goods directly to consumer online, you should fill in the ANR/3 form in order to register for VAT purposes, and send it to the Agenzia
In this case you should send through a courier:
When do you pay VAT taxes?
The VAT payment deadlines are listed below:
Are there other sales taxes due?
For more info, and according to your legal status there may be other taxes due. These could vary also according to the products or services you are planning to sell in Italy or on the amount of income you are generating.
Remember that international operations are VAT excluded. However, if the sales is done within the EU, you have to file the INTRASTAT model.
For more info check our article about income taxes in Italy as well.
If you want to open a business in Italy, consider reading article about freelancing italy or look at the video below.
Want to read more? Check out also our articles about filing your taxes in Italy, airbnb taxes in Italy, or our guide for retiring in Italy.
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.