Consumption/VAT/Sales Tax in Italy

Nature of the Tax

IVA (Imposta sul Valore Aggiunto)

Standard Rate

20%

Reduced Tax Rate

There are reduced rates of VAT of 4% and 10% on basic products.
A rate of 10% is applied to some foodstuffs, live animals, some fuel supplies, catering, transport and housing.
A rate of 4% is applied to some foodstuffs, imports of agricultural products, medical supplies, books and magazines.

Exclusion From Taxation

In Resolution No. 75/E, the Revenue Agency has provided clarification of the VAT exemptions applicable to supplies of services intended to realise any of the productive processes concerned in management of a common investment fund. Indeed, Financial, insurance and medical services are exempt from VAT. Exports are not subject to VAT.

Method of Calculation, Declaration and Settlement

IVA is charged on assets and services in Italy as well as on imports into Italy. Registration is necessary. Every year, the Italians have to make their "dichiarazione dei redditi" (income declaration) for the previous year based on their estate and their revenue. The document must be sent in by May 31 at the latest.

Other Consumption Taxes

Other taxes are determined at the national or local level such as taxes on tobacco, petrol, alcohol, oil, etc.

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