Indirect tax ebook - Italy

Scope

The Value Added Tax1 (VAT) is an Indirect Tax on consumption of goods and services in Italy, that is levied at each stage of the production and distribution. Liability for VAT rests with the person supplying the taxable goods or services or importing goods into Italy. However, the supplier is allowed to deduct from its VAT liability on sales made the amount of VAT paid and properly invoiced to it in relation to purchases effected by it, or VAT paid by it at importation. The actual burden of the tax is therefore borne by the final consumer.

VAT is chargeable on supplies of goods and services for a consideration made in Italy by a taxpayer acting as such. The constituent elements of the charging provision are as follows:

• there must be a supply (either of goods or services);
• the supply must be made in Italy rather than elsewhere;
• the supply must be a taxable supply (i.e. chargeable to VAT at the standard or reduced rates);
• the supply must be made by a taxpayer (in Italy, a taxpayer is any person carrying on a business, or an artistic or professional activity registered for VAT purposes); and
• the supply must be made in the course or furtherance of a business.

• Introduction
• Scope
• Registration
• Tax rates
• Reporting & filing
• General tax application/Time of supply