Italian VAT number – what is it and who needs it?

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VAT regulations in Italy are included in the VAT Act. Value Added Tax, known in Italian as IVA (Imposta sul Valore Aggiunto), was introduced in 1972. Italy carried out a major reform of its reporting system some years ago (2017). Previously, only monthly payments and an annual VAT return were required in the following year. From 2017, quarterly VAT returns and invoice statements are also required, with annual returns still required. The entire VAT system is supervised by the Ministry of Finance.

Italian VAT – what is it?

Italian legislation introduces the principle that all companies established in Italy, doing business in Italy and /or supplying taxable goods and/ or services, must comply with certain rules, such as Italian VAT registration or the regular filing of VAT returns. If a foreign company carries out transactions taxed in Italy, then it is obliged to register for VAT in that country.

Italian VAT number

The basic Italian VAT is 22% and covers all products and services except for products and services subject to reduced VAT rates (10%, 5% and 4% plus zero rate). VAT invoices in Italy should be issued on the day of delivery of the goods and up to 15 days after the end of that month when the delivery of the products took place. VAT invoices in Italy are compulsorily stored for four years. For transactions less than 100 euros, you can issue a simplified version of the VAT invoice.

Once a company registers for Italian VAT, it must now declare all taxable transactions and pay the VAT due. Taxpayers with an annual turnover of more than EUR 700 thousand, the VAT due on this account must be paid monthly. Enterprises with a turnover below the above-mentioned amount can pay VAT every quarter, but then they have to pay a 1% non-refundable surcharge.

Should you register for Italian VAT number?

Foreign companies that are not Italian VAT payers but provide goods (and to a lesser extent services) may be required to register with the Italian tax office as a domestic taxable person. The basic situations that require such steps are:

  • import of goods to Italy (except when the customer has previously registered as an Italian VAT payer),
  • transactions for the purchase and sale of goods in Italy, when the supplier and customer are not previously registered as Italian VAT payers,
  • delivery or acceptance of intra-community deliveries or receipt of goods from other EU countries,
  • selling goods to individual consumers via the Internet,
  • storage of goods in Italian warehouses for deliveries taking place in Italy (or in other EU countries),
  • Collection of entrance fees (entrance tickets) to live events, exhibitions or conferences
  • e-commerce internet transactions with Italian consumers.

As in other EU countries, economic entities that make mail order sales in Italy are required to register in the Italian VAT system after exceeding the threshold of 10,000 zlotys. EUR of sale. Then you can also register for the VAT-OSS system. However, when selling goods via the Internet, there is a VAT registration threshold of EUR 35,000 per year. Below this amount, no Italian VAT registration is required. More information you can find here: https://polishtax.com/italian-vat-number-what-is-it-and-who-needs-it/.

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