VAT and Sales Tax in Italy

What are the Italian IVA rates?

Italy's value-added tax -- officially the Imposta sul Valore Aggiunto (IVA) -- is governed by Presidential Decree DPR 633/1972, which transposes EU VAT Directive 2006/112/EC into Italian law. Four positive rates apply. The 22% standard rate covers most goods and services, including electronics, clothing, professional services, and restaurant meals. The 10% reduced rate covers hotel and hospitality services, most restaurant services, certain food preparations, some pharmaceutical products, residential renovation works, electricity and gas for domestic use, and cultural event admissions (theatres, museums, concerts where specific conditions of Allegato III DPR 633/1972 are met). The 5% super-reduced rate applies to certain social-care and health services, certain foods including gluten-free products for diagnosed patients and feminine hygiene items from 2023, and since July 2025 to the sale and import of art, antiques, and collectibles. The 4% super-super-reduced rate covers basic staples (bread, milk, eggs, fresh fruit and vegetables, pasta, butter, olive oil), books, newspapers, periodicals, e-books and e-periodicals (extended from 1 January 2020), medicines, medical aids and orthopaedic prosthetics for persons with disabilities, and newly constructed primary-residence housing under specified conditions. Zero-rating applies to exports outside the EU and intra-EU supplies to VAT-registered customers in other Member States; both retain the right to recover input IVA. Certain transactions are fully exempt including education, insurance, financial services, certain property leases, and specified healthcare, with no input-IVA recovery permitted on costs attributable to exempt supplies.

IVA rate summary

What is the regime forfettario and how does it affect IVA?

The regime forfettario (flat-rate regime) established by Articles 54-89 of Law 190/2014 and expanded by Law 197/2022 is a simplified tax framework for self-employed individuals and sole traders with annual gross revenue at or below EUR 85,000. Electors pay a single substitute tax in place of IRPEF, IRAP, and regional surcharges: 15% as the standard rate, or 5% for new businesses in their first five tax periods provided the activity is genuinely new and the applicant has not carried out the same professional, artistic, or entrepreneurial activity in the preceding three years. Taxable income is not actual net profit but is calculated by applying an official profitability coefficient (coefficiente di redditivita) to gross revenue -- the coefficient ranges from 40% to 86% depending on the ATECO activity code (for example, 67% for software and IT services, 78% for teaching, 40% for short-term accommodation). For IVA purposes, forfettario electors are outside the ordinary VAT framework: they issue invoices without charging IVA and invoices must state the statutory exemption reference under Articles 54-89 Law 190/2014 and may not recover input IVA on purchases. If revenue exceeds EUR 85,000 in a tax year, the trader exits forfettario the following year; if revenue exceeds EUR 100,000 in any year, the exit is immediate for the transaction breaching that ceiling. Access conditions also require prior-year employment or pension income not exceeding EUR 35,000 (raised for 2025 and 2026 per Agenzia delle Entrate guidance) and prior-year staff or ancillary work costs not exceeding EUR 20,000. Forfettario is incompatible with other special VAT regimes, non-residency (except EU/EEA residents meeting specific criteria), and simultaneous participation in a partnership carrying on the same activity. Invoices under forfettario are subject to a EUR 2 stamp duty on amounts exceeding EUR 77.47.

How does mandatory e-invoicing (fattura elettronica) work?

Italy introduced mandatory B2B and B2G electronic invoicing from 1 January 2019, making it one of the earliest EU member states to mandate structured e-invoicing across the private sector. The infrastructure is the Sistema di Interscambio (SdI), operated by Agenzia delle Entrate through its IT subsidiary Sogei. All Italian-VAT-registered businesses -- forfettario electors joined the obligation from 1 July 2022 -- must issue and receive invoices in the FatturaPA XML format (or the EU-standard EN 16931 format adapted for Italian requirements). Invoices must be transmitted to SdI within 12 days of the taxable event; SdI validates the format, assigns a unique Codice Univoco, and routes the invoice to the recipient's registered PEC (certified email) or accredited interchange channel within approximately 48 hours. Accepted invoices serve as the official tax record for both issuer and recipient, and Agenzia delle Entrate retains a copy for 10 years. Cross-border transactions with non-Italian-VAT-registered counterparties have been integrated into SdI from 1 January 2024 under Law 213/2023, replacing the prior quarterly Esterometro aggregate report. A permanent exception applies to healthcare B2C invoices, where patient confidentiality prohibits SdI routing; those are reported via the Sistema Tessera Sanitaria instead. Transmission to SdI is free of charge via the Fatture e Corrispettivi portal, PEC, or accredited intermediary software. Non-compliance carries penalties of 90%-180% of the IVA amount on the non-compliant invoice.

How is partita IVA registration obtained?

Italian law requires every person or entity conducting a professional, artistic, or entrepreneurial activity in Italy -- regardless of turnover -- to obtain a partita IVA (the Italian VAT identification number) before the first taxable supply. There is no general domestic registration threshold; only forfettario electors operate outside ordinary IVA charging obligations. The application is made to Agenzia delle Entrate: sole traders and freelancers file Modello AA9/12, companies file Modello AA7/10. The form is submitted online via the AdE portal (using SPID, CIE, or CNS digital identity) or in person at any AdE office and must include the ATECO code for the primary activity. Registration must be completed within 30 days of commencing activity. The 11-digit partita IVA number (prefixed "IT" for EU intra-community purposes) is issued promptly via the portal. Foreign businesses without an Italian permanent establishment may register directly (EU businesses and certain non-EU businesses under reciprocity arrangements) or must appoint an Italian fiscal representative (rappresentante fiscale) who is jointly and severally liable for the business's Italian IVA obligations. Non-EU businesses storing goods in Italy must register before any taxable supply.

How are periodic IVA settlements (liquidazione) structured?

Registered IVA taxpayers account for output IVA collected on sales and offset input IVA paid on purchases, remitting or reclaiming the net balance each settlement period. Filing frequency depends on annual turnover: traders whose turnover exceeds EUR 400,000 (services) or EUR 700,000 (goods) must file monthly Liquidazioni Periodiche IVA (LIPE), due by the 16th of the second month following the reporting month; all others may file quarterly, with LIPE submissions due 28 February (Q4 of prior year), 31 May (Q1), 30 September (Q2), and 30 November (Q3), with payment by the 16th of the month following each quarter plus a 1% surcharge applied to quarterly filers' deferred amounts. An annual recapitulative Dichiarazione Annuale IVA is filed by 30 April of the following year. IVA credit balances exceeding EUR 2,585 may be carried forward or refunded annually; refunds above EUR 30,000 require a surety guarantee or a compliance certificate (visto di conformita) from a registered tax practitioner. The SdI data stream provides Agenzia delle Entrate with near-real-time cross-matching of supplier and customer LIPE declarations.

For the broader Italian tax landscape, including income tax (IRPEF), corporate tax (IRES/IRAP), and the forfettario substitute-tax calculation in detail, see the Italy country overview. To determine which IVA rate applies to a specific supply, structure the correct forfettario eligibility analysis, or manage periodic LIPE filings, consult a commercialista (Italian-qualified accountant registered with the Ordine dei Dottori Commercialisti e degli Esperti Contabili) -- a qualified tax professional familiar with current AdE practice.