Tannet Group Limited has over 10 year experience about investment in Italy, the following article is the introduction of the V.A.T. and other relevant taxes of Italy, we do hope it can be useful, and help you to start and run the business in Italy.

Value Added Tax
The sale of goods, services and imports is subject to value added tax (IVA), although there are exemptions regarding certain activities and operations. The ordinary rate is 20% and is applied to all operations, except those that are exempt or non-taxable. A rate of 10% is commonly used for services, such as restaurants. A reduced rate of 4% applies to necessities, e.g., basic foods, fertilizers, cereals for zoo-technical use, orthopaedic devices, newspapers and books.
Anyone wishing to set up a business or in a profession must be VAT registered (Articles 4 and 5 of Italian VAT Law DPR No. 633/72) . There can be no exemption from registration.

In order to obtain a VAT identification number, foreign traders must report to the VAT office responsible for the area in which they are domiciled for tax purposes and fill in a “commencement of activity” form.

If a foreign trader has no permanent establishment, he may designate a tax representative. The latter is a natural or legal person resident in Italy who is able to meet all the obligations and exercise the rights provided for in the VAT legislation. The tax representative may carry out invoicing, registration, settlement, declarations and all other obligations inherent to the operations carried out by the foreign trader in Italy. Furthermore, he is jointly and severally liable with the party represented as regards the obligations laid down in the VAT law.

Any taxable person who supplies goods or provides services is required to issue an invoice. The invoice has to be issued at the time the goods are supplied or upon payment when services are provided. The invoice must contain specific information, including the date and a consecutive serial number.

VAT registered traders engaged in business must present a VAT declaration on an annual basis. Payments are made monthly by the 1 6th day of the following month. There are special regimes as regards periodic VAT returns for particular categories of traders (e.g., travel agents, compensation scheme for firms which control, or are controlled by, other firms, etc.). As regards, specifically, imports of goods from non-EU countries, VAT must be paid upon customs clearance, together with customs duties, if applicable.

It is possible to obtain further information about the Italian VAT system from:
Ministero dell’Economia e delle Finanze
Dipartimento per le politiche fiscali
Ufficio Relazioni Internazionali
Via Pastrengo, 22 - 00185 Roma
Tel: 064 7604300-1 -2-3
Fax: 0647603911
Email: dpf.ri@finanze.it
Web: www.Finanze.it

Other Relevant Taxes
Italy has a very complex taxation system, with several additional direct and indirect taxes.
A registration tax usually applies to the following operations: the constitution of a company, increases in company stock, contributions by partners to the capital account or as venture capital, extraordinary operations (transformations, mergers and scissions), pay-outs to shareholders, the transfer of corporate shares and the issuing of stock.
The following additional main indirect taxes exist in Italy: a property tax (so-called ICI, namely a municipal property tax on buildings, building sites and agricultural land), revenue stamps for acts, documents and registers; tax on mortgages and land; and tax on donations.

All the information and data above is only for reference, for further information, please feel free to contact us.