IVA (Imposta sul Valore Aggiunto) is Italy's value-added tax, equivalent to VAT in other EU countries. It applies to most goods and services sold in Italy and represents a major compliance obligation for all businesses with a Partita IVA.
IVA Rates in Italy
Italy applies four IVA rates:
- 22% — Aliquota ordinaria: The standard rate applying to most goods and services
- 10% — Aliquota ridotta: Applies to certain foodstuffs, hotel and restaurant services, home renovations, and pharmaceutical products
- 5% — Aliquota ridotta: Applies to certain health and social services
- 4% — Aliquota super ridotta: Applies to basic foodstuffs (bread, milk, olive oil), newspapers, and first-home purchases
Registering for a Partita IVA
Anyone conducting regular business or professional activity in Italy must register for a Partita IVA (VAT number). The process involves:
- Filing form AA9/12 (individuals) or AA7/10 (companies) with the Agenzia delle Entrate
- Choosing your ATECO activity code (codice ATECO) that describes your business
- Selecting your tax regime (Regime Forfettario or Regime Ordinario)
- Registering with the Camera di Commercio if you are a trader or artisan
The Partita IVA number is 11 digits and is used on all invoices, communications with tax authorities, and within the EU VIES system for cross-border transactions.
Electronic Invoicing (Fatturazione Elettronica)
Since January 2019, all B2B and B2C invoices in Italy must be issued electronically through the Sistema di Interscambio (SDI). Key points:
- Invoices must be in XML format (FatturaPA standard)
- They are transmitted through the SDI, which validates and delivers them
- Each recipient is identified by a codice destinatario (7-character code) or PEC address
- From 2024, even Regime Forfettario businesses must issue electronic invoices
IVA Filing and Payment
IVA must be reported and paid on a regular schedule:
- Monthly filing: Required if annual IVA exceeds €400,000 (services) or €700,000 (goods). Payment due by the 16th of the following month.
- Quarterly filing: Available for smaller businesses. Payment due by the 16th of the second month after quarter-end, with a 1% interest surcharge.
- Annual return: The Dichiarazione IVA must be filed by April 30th each year, summarizing all IVA transactions.
IVA Deduction and Recovery
Businesses can deduct input IVA (IVA paid on purchases) from output IVA (IVA collected from customers). The difference is paid to or recovered from the tax authorities. Key rules:
- Input IVA is deductible only if the purchase is related to your business activity
- Certain items have limited deductibility (e.g., company cars at 40%, entertainment at 50%)
- IVA on purchases must be recorded within the tax period to be deductible
- If input IVA exceeds output IVA, you can request a refund or carry the credit forward
Common IVA Pitfalls
- Late invoicing penalties: Invoices must be issued within 12 days of the transaction (or by the 15th of the following month for deferred invoices)
- Intra-EU transactions: Sales to EU businesses are zero-rated but must be reported in the Intrastat declaration
- Reverse charge: Certain transactions (construction, cleaning services) require the buyer to self-assess IVA
Use our Italy invoice calculator to correctly calculate IVA on your invoices.