Italy`s 20% VAT rate is one of the ten highest VAT rates in the world. Countries with similar VAT rates include Belgium with a VAT of 21%, Ireland with a VAT of 21% and Finland with a VAT of 22%. At the same time, the following items, provided that they are indicated separately from the price actually paid or payable, are not included in the customs value (non-exhaustive list): The following items are generally deducted at the following rates: The sharply reduced VAT rate (4%) applies to television licenses, newspapers, magazines, books, medical equipment for the disabled. Customs duties are levied when goods are imported into the EU. The amount of customs duty payable depends on the value and nature of the imported goods. In particular, the Common Customs Tariff provides for a rate of taxation for each type of goods to be applied to the value or number of goods imported. Of course, as a member of the European Union, Italy also “uses” VAT to manage domestic and international sales. This article briefly shows what VAT really is and what the rates are and what you need to know about VAT in Italy. Italy has opted for reduced and sharply reduced VAT rates for a number of items allowed by the VAT Directive (source: European Commission): Rents of residential and commercial buildings or parts thereof are generally exempt from VAT without the right to deduct input VAT and are subject to a registration tax of 2% or 1%. *A sharply reduced rate of 4% applies to certain foodstuffs, medical devices for the disabled, books, newspapers and certain magazines. Changes should be made to the VAT rate applicable to admission to cultural events (currently the standard rate). Depending on the type of buildings to which the lease relates (p.B.
residential and commercial buildings) and the supplier (p.B. individuals, construction companies, taxpayers other than construction companies). While the EU sets the general parameters of VAT rates, including setting the minimum standard VAT rate at 15%, Italy still sets the largest number of rates. All taxable goods and services not included in the following Italian VAT rates. Starting in fiscal 2020, businesses will levy a 3% tax on the value of certain digital services, less VAT and other indirect taxes. The application of a reduced or zero duty may even depend on the existence of preferential tariff treatment or the existence of a special legal exemption for any type of goods. The tax on financial transactions in cash applies to the purchase of shares and other equity instruments issued by Italian companies, as well as to securities (if any) pursuing such Italian shares (e.B. ADR). The tax base is the daily net balance of transactions in the same financial instruments made by the same person on the same settlement date.
Preferential origin depends on the existence of trade agreements between the European Union and other third countries or facilities that the European Union grants unilaterally to non-EU states. In the context of the reverse charge procedure, the obligations relating to supplies of goods and services effected in Italy by non-resident taxable persons to taxable persons established in Italy are fulfilled by Italy. The recipient of the goods and/or services must enter the invoice received from the EU supplier or, in the case of a third-party supplier, issue a self-invoice and enter it in the VAT and VAT purchases register within a defined period. The first reduced VAT rate (10%) applies to water supply, passenger transport, entry to cultural and sporting events, hotels, restaurants, certain foods. Decree-Law Rilancio (No 34/2020) definitively repealed the safeguard clauses that should have introduced a series of automatic increases in VAT rates and (ii) excise duties on certain petroleum products from 1 January 2021. Non-EU companies selling in Italy must appoint a tax representative in addition to VAT registration and VAT returns. Tax representatives are responsible for the correct VAT returns of their non-EU customers. Avalara offers a tax representation service as part of its international VAT and GST registration and return service. VAT is a general excise duty that is measured on the value added to goods and services. VAT, which is what VAT means, applies to almost all goods and services bought and sold within the European Union. .