Italian VAT rates and VAT compliance

Whilst the EU sets the broad parameters for VAT rates, including setting the minimum standard VAT rate at 15%, Italy still sets most of the rates.

The current rates are:

There are strict rules for companies who have received an Italian VAT registrations.  These mirror the EU’s VAT Directive, and include

• Basic information required for Italian VAT invoices.
• Process and approvals for the use of e-invoices, including compliance and control procedures with the signature and authenticity of an invoices.
• Preparation of bookkeeping records, known as VAT Registers in Italy.  Accounting data must be retained for
• Correct invoicing of customers for goods or services in accordance with the Italian time of supply VAT rules.
• Treatment for credit notes and other corrections.
• Use of approved foreign currency rates.

It is important to determine the correct time for determining when the supply is made.  This is known as the tax point or time of supply.  In Italy, or goods, it is considered as the point of transfer of title.  Any VAT due should then be declared in the subsequent VAT return.  The tax point for supplies is the date of payment or partial payment.  This is a deviation from the regular EU rules of the time of completion of the services.

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