VAT is a complex tax; this post tries to explain the VAT implication for you and your business. This post is not meant to be comprehensive of all the VAT legislation, and it does not consider any special tax regime.
WHAT IS VAT?
VAT stands for Value Added Tax, it is a tax levied on consumption of goods and services within the Italian borders.
WHO PAYS VAT?
VAT is paid by the final consumer; however, any business has to charge VAT on its products/services and can claim input VAT on products/services purchased.
WHICH VAT BRACKETS ARE CURRENTLY VALID IN LEVIED IN ITALY?
The Italian VAT system has currently three brackets:
WHO HAS TO REGISTER FOR VAT?
Theoretically, any business that sells items and/or provides services in Italy has to register for VAT, the registration process can be made online with no fees.
Despite this general obligation there are some favourable tax regimes that disallow the VAT registration; these are:
Once your entity is VAT registered in Italy, it has to file several returns and pay any outstanding VAT liability either quarterly or monthly.
If the filer is monthly, any VAT liability is due on/before the 16th of the following month. If the filer is quarterly, VAT liabilities are due as follows:
On top of the liabilities payments, the following returns have to be filed:
IF I BUY/SELL ABROAD HOW DO I PAY VAT?
International operations are VAT excluded (therefore no VAT is levied); however, if the sales is performed within the EU, you have to file the INTRASTAT model.
IF I AM LATE OR OMITT ANY DEADLINE, WHICH SANCTIONS APPLY?
The follow list includes only some of the possible sanctions.
Omitted Yearly return:
Accounting Bolla has helped many businesses in disentangling VAT implications, especially when operating in multiple jurisdiction; Accounting Bolla provides the following services:
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.