Italian VAT is known as “Imposta suI Valore Aggiunto” (IVA). The standard VAT rate is 22% and there are reduced rates of 4%, 5%, 10% (i.e., health services; educational services; primary necessity goods), and 0% (i.e., insurance services). Livigno, Campione d’Italia and the territorial waters of Lake Lugano are not considered part of the EU for VAT purposes
Submission Method in VAT4U - Bot-based automation
Requirements:
Username, password, and 2FA code
Profile number (for users with multiple companies under the same account)
How It Works:
Bot logs into the portal, injects the claim data, and prepares the submission. Manual submission is strongly discouraged due to a lack of CSV/XML import options. Unfortunately, no fallback “get claim data” function is available.
When submitting claims from Italy, there’s an additional option to select Article 63. This refers to a specific VAT treatment under Italian tax law. Users who regularly file claims from Italy are familiar with it, though it’s optional and can be selected when creating the claim in the portal.
Another important point is the profile number. Many users have access to multiple company profiles under the same login in the Italian portal. That’s why we ask users to specify which profile they want to use for the claim, to ensure it’s submitted under the correct company.
VAT Refund Procedures for EU and Non-EU Businesses
Under EU Directive 2008/09/EC (formerly the 8th Directive), Italian-established companies can reclaim VAT incurred in other EU countries, while businesses from other EU or non-EU countries can claim VAT refunds on purchases made in Italy.
Refunds for Italian Businesses
a. Within the EU (Directive 2008/09/EC)
Italian companies must file VAT refund claims electronically via the Agenzia delle Entrate portal. Claims can be submitted by the claimant or an authorized intermediary with a valid proxy.
Filing: Requires registration in Entratel or Fisconline.
Data entry: Each invoice must be entered manually with full details; scanned copies (PDF, JPEG, TIFF, ZIP) must be attached.
Size limits: Attachments cannot exceed 5MB per file.
Processing: Receipts confirm submission; the member state of refund makes the final decision.
b. In Non-EU Countries (13th Directive equivalent)
Italian companies must follow the refund procedure of the non-EU country of refund; Italy’s portal cannot be used. A “certificate of taxable status” (certificato di partita IVA) is usually required.
Refunds for EU Businesses Claiming in Italy
Eligibility:
Businesses can reclaim Italian VAT if they:
Are not VAT-registered or established in Italy;
Have no fixed establishment in Italy; and
Conduct no taxable supplies in Italy (with limited exceptions such as reverse-charge transactions).
Non-refundable VAT:
Accommodation, restaurant, and bar expenses are deductible (100%), unless linked to entertainment. VAT on cars, fuel, and maintenance is 40% deductible for mixed use and 100% for business-only use.
Claims:
Minimum amounts: €400 (for <1 year), €50 (for full year).
Period covered: 3–12 months within one calendar year.
Deadline: 30 September of the following year.
Proxy: A notarized power of attorney is required if filed by a third party.
Refunds & Appeals:
Authorities must decide within four months (extended to six or eight if more information is requested). Refunds are paid in EUR within 10 business days after approval; interest applies for delays. Rejections can be appealed within 60 days.
Refunds for Non-EU Businesses Claiming in Italy (13th Directive)
Eligibility:
Refunds are allowed only if reciprocity exists. Italy currently has agreements with Israel, Norway, and Switzerland.
Requirements:
Claims must be submitted using Form VAT 79 and sent by mail or courier to the Centro Operativo di Pescara with:
Original invoices;
Proof of payment; and
A certificate of taxable status (issued within the last year).
Processing:
Decision timeline: 6 months (or 8 if further information is requested).
Submission deadline: 30 September of the following year.
Penalties: 200–400% of VAT if unduly refunded.
Typical timeframe: 6–8 months.
VAT Penalties Overview (Effective from 1 September 2024)
Italy enforces strict administrative and criminal penalties for VAT-related violations, ranging from minor reporting errors to serious tax fraud.
Administrative Penalties
Late or Missing Registration – Failure to notify the start of taxable activity: EUR 500–2,000.
Failure to Issue/Record Invoices –
• For taxable transactions: 70% of unpaid VAT (previously 90–180%).
• For exempt transactions: 5% of the uninvoiced amount (minimum EUR 300).Failure to Pay VAT – 25% of unpaid VAT, plus 5% annual interest (or 3.5% during audit settlements). Reduced by half if paid within 90 days, or to 1/15 per day if within 15 days.
Failure to Maintain VAT Records – EUR 1,000–8,000.
Failure to File Annual VAT Return – 120% of VAT due (minimum EUR 250). If filed late but before audit, the penalty equals 75% of unpaid VAT.
Errors and Reporting Violations
Incorrect or Incomplete Data – EUR 500–2,000.
Incorrect Reporting of Foreign Transactions – EUR 2 per invoice, up to EUR 400 per quarter (reduced by half if corrected within 15 days).
Incorrect Annual VAT Return – 70% of wrongly declared VAT (minimum EUR 250).
Reverse-Charge Mechanism
Failure to Apply Reverse Charge –
• With full deduction rights: EUR 500–10,000.
• With partial deduction rights: 70% of unpaid or wrongly deducted VAT.
• Unregistered transactions: 5% of the taxable amount (minimum EUR 1,000).
• Misapplication (supplier or purchaser): EUR 250–10,000, or 70% of VAT in fraudulent cases.
Intrastat and Notification Violations
Missing/Incorrect Intrastat Returns – EUR 500–1,000 per return, halved if corrected within 30 days.
Failure to Update VAT Registration Details – EUR 500–2,000, reducible through voluntary disclosure.
Criminal Offenses (Fraud and Evasion)
Under Legislative Decree No. 74/2000:
Omitted VAT Return (VAT evaded > EUR 50,000): 2–5 years imprisonment.
Unfaithful VAT Return (VAT evaded > EUR 100,000): 2–4.5 years imprisonment.
Unpaid VAT (> EUR 250,000): 6 months–2 years imprisonment.
Personal Liability – Company representatives are personally accountable for criminal VAT violations.
Statute of Limitations
Five years from the year following the VAT return filing.
Seven years if the VAT return was not filed.
Extended by any delay in submitting requested documents or by audit suspensions (e.g., COVID-19 extensions).
Overall, Italy’s VAT penalty system is comprehensive and increasingly stringent, emphasizing timely compliance, accurate reporting, and transparency in cross-border transactions.