Italy VAT Guide 2026 — IVA Rates (22%/10%/5%/4%)

Overview of Italian IVA

Italy's value-added tax — IVA (Imposta sul Valore Aggiunto) — is a consumption tax applied to most goods and services supplied in Italy. It is governed by Italian DPR 633/1972 and harmonised with EU VAT directives. IVA is administered by the Agenzia delle Entrate. Businesses registered for IVA must charge the tax on their taxable supplies (output IVA) and may recover IVA paid on their business purchases (input IVA). The net difference is remitted to or refunded by the tax authority.

Italy applies a destination principle: IVA is due in the country where the goods or services are consumed. This means that exports are generally zero-rated (0% IVA) and imports are taxed at the same rates as domestic supplies. For digital services and electronic commerce, special EU rules determine the place of supply.

IVA Rates 2026

Italy has four IVA rates — the standard rate and three reduced rates — applied depending on the type of goods or services:

Standard Rate — 22%: Applies to most goods and services not covered by a reduced rate or exemption. This includes electronics, clothing, adult clothing, household appliances, motor vehicles, professional services (legal, accounting, consulting), restaurant meals (with exceptions), hotel stays (with exceptions), and general consumer goods.

First Reduced Rate — 10%: Applies to: tourism services (hotel accommodation, camping, holiday villages), certain food products (e.g., fresh meat, fish, fruits, vegetables, sugar, olive oil — but not basic staples which are at 4%), passenger transport (urban, suburban, and intercity bus/train/ferry — air and sea transport are generally exempt), demolition and renovation services on residential buildings, certain cultural events and entertainment, pharmaceuticals not covered by the 4% rate, and electric power and natural gas for domestic consumption.

Second Reduced Rate — 5%: Applies to: certain social, educational, and cultural services, some food products (e.g., certain prepared foods), specific agricultural inputs, and some assistive devices for the disabled. This rate was introduced more broadly in recent years to align with EU directives on reduced VAT rates.

Third Reduced Rate — 4%: Applies to: basic food staples (bread, milk, eggs, fresh pasta, rice, vegetables, fruits), newspapers and periodicals (including digital), books (including e-books), medical devices for the disabled, social housing construction and renovation, and certain agricultural products (seeds, fertilisers, pesticides). This is the lowest IVA rate and applies to essential goods and services.

Exempt and Zero-Rated Supplies

Certain supplies are exempt from IVA (no IVA charged and no input IVA recovery), while others are zero-rated (0% IVA but input IVA is recoverable).

Exempt Supplies (no input IVA recovery): Exempt supplies include: insurance and reinsurance transactions, most financial services (loans, credit, banking, payment processing, securities transactions), educational services provided by recognised institutions, healthcare services provided by regulated medical professionals (doctors, dentists, physiotherapists, hospitals), postal services provided by the universal postal service operator, certain cultural services (museums, libraries), and supply of land and buildings (with certain exceptions for new buildings within 5 years of completion). Businesses making exempt supplies cannot recover input IVA attributable to those supplies (pro-rata rules apply for mixed businesses).

Zero-Rated Supplies: The main categories of zero-rated supplies are: exports of goods outside the EU (must be accompanied by appropriate customs documentation - DAU / bolletta doganale), intra-Community supplies of goods to VAT-registered persons in other EU Member States (subject to the requirement to have a valid EU VIES VAT number), and international transport of goods (related to exports and intra-Community supplies).

IVA Registration and Compliance

Who Must Register: Any person or entity that habitually carries on a business (impresa) or profession (arte or professione) in Italy must obtain an IVA number (partita IVA). Registration is required before the start of any taxable activity. Non-resident businesses making taxable supplies in Italy must also register for IVA, unless they use the OSS (One-Stop Shop) scheme or VAT reverse charge applies.

Registration Process: Apply to the Agenzia delle Entrate using the appropriate AA9/AA7 form (AA9 for individuals, AA7 for companies). The IVA number is issued immediately (for electronic applications) or within a few days. The registration includes information on the type of activity, legal form, and the applicable tax regime (e.g., ordinary regime, forfettario regime). The IVA number format is IT followed by 11 digits for individuals (codice fiscale) or IT followed by 11 digits for companies.

Filing Requirements: VAT-registered businesses must file: LIPE (Liquidazioni Periodiche IVA) — quarterly or monthly VAT return summarising output IVA, input IVA, and the net amount due — filed by the end of the month following each period; Dichiarazione IVA (annual VAT return) — filed annually by 30 April of the following year, summarising the full year's IVA transactions; Esterometro — quarterly reporting of cross-border transactions (supplies to/from EU and non-EU counterparties), required since 2022 with the transition to mandatory e-invoicing. Since 2019, Italy has mandatory e-invoicing (fatturazione elettronica) for all domestic B2B and B2C transactions, using the SdI (Sistema di Interscambio) platform.

Payment Deadlines: Monthly IVA is due by the 16th of the following month. Quarterly IVA (for businesses that opt for quarterly filing) is due by the 16th of the month following the end of each quarter, with a 1% interest surcharge. The annual balance is due by 30 April following the tax year (or 30 June with a small penalty). IVA is paid using the F24 payment form (modello F24).

Reverse Charge and OSS

Reverse Charge (Inversione Contabile): In certain B2B transactions, the IVA is not charged by the supplier but is accounted for by the customer (applicable to: imports of goods, supplies from non-resident businesses, certain construction subcontracting, sale of scrap metal and waste, sale of mobile phones and computer chips, and certain energy products). The customer issues an autofattura (self-invoice) or integrates the supplier's invoice and records both output and input IVA (which typically nets to zero).

OSS (One-Stop Shop): The EU OSS system allows non-resident businesses selling goods or digital services to consumers (B2C) in Italy (and other EU Member States) to declare and pay Italian IVA through a single quarterly return in their home Member State. This replaces the need for multiple VAT registrations across the EU. The OSS is optional — businesses may still register for IVA in Italy directly. For imports of low-value goods (under €150), the IOSS (Import One-Stop Shop) scheme applies.

FAQs

What is the difference between IVA and VAT?

IVA (Imposta sul Valore Aggiunto) is simply the Italian name for value-added tax (VAT). The rules are aligned with EU VAT directives. The standard rate of 22% is one of the highest in the EU. The reduced rates of 10%, 5%, and 4% apply to specific categories of goods and services. There is no reduced rate for restaurant food in Italy (it is at 10% for sit-down meals but only for the food component; the service component is at 22% in some interpretations, though the standard 10% is broadly applied).

Do I need a partita IVA to freelance in Italy?

Yes. Anyone carrying on a self-employed activity (lavoro autonomo) in Italy must obtain a partita IVA and register with INPS. If your expected annual income is under €85,000 and you meet certain requirements (no prior VAT registration, no employees, limited capital expenditure), you may qualify for the regime forfettario (flat-rate regime), which offers a reduced 15% (or 5% for the first 5 years) substitute tax instead of progressive IRPEF, plus simplified IVA obligations (no charging of IVA on invoices, though you still have a partita IVA number).

What is the IVA threshold for small businesses?

There is no general IVA exemption threshold in Italy (unlike some other EU countries). Even small businesses must register for IVA if they carry on taxable activity. However, the regime forfettario allows qualifying small businesses to charge IVA at 0% on their invoices (IVA non esposta in fattura) and they are not required to collect or remit IVA. They also cannot recover input IVA on their purchases — the output IVA not charged acts as a simplification measure rather than a true exemption threshold.

Disclaimer

This guide is for informational purposes only and does not constitute tax advice. Italian IVA law is complex and subject to frequent change. Consult a qualified commercialista or tax advisor for advice specific to your situation. Rates and thresholds for 2026 are based on legislation enacted by June 2026.