Italian VAT Returns & Recovery
Both resident and non-resident firms are required to remit a VAT for the relevant period. The frequency of these VAT payments is determined by the last calendar year’s annual turnover:
- EUR 400,000 for self-employed individuals and service-providing companies.
- EUR 700,000 for companies engaged in other activities, such as buying/selling goods.
For those making quarterly VAT payments, a 1% interest is applied to the quarterly VAT owed.
VAT Returns in Italy
In Italy, both resident and non-resident businesses must file both the Quarterly VAT Returns (“Liquidazioni periodiche IVA”) and the Annual VAT Return.
Filing Deadline
The VAT payments deadlines are:
- Quarterly taxpayers: Due by the 16th day of the second month after each calendar quarter. However, for the last quarter, the VAT is due by 16 March of the succeeding year, provided the taxpayer chose the quarterly VAT payment scheme.
- Monthly taxpayers: Due by the 16th day of the subsequent month.
Return Deadlines:
- Quarterly VAT Return: Due on the final day of the second month after each quarter. Specifically, the return for the second quarter is due by 16 September, and for the fourth quarter, it’s due by the last day of February.
- Annual VAT Return: Must be filed between 1 February and 30 April of the year after.
Should any deadline fall on a Saturday or public holiday, the due date is pushed to the subsequent working day.
Amendments:
Modifications to both the Quarterly and Annual VAT returns are permissible.
Selling in Italy?
Electronic Filing
To comply with Article 250 of the EU VAT Directive, Italian taxpayers are required to electronically file their VAT forms using the online services of the Italian Revenue Agency and must register on the agency’s online telematics services portal to do so. The taxpayer must also download specified software in order to complete the filing process, according to conditions established by the Italian Revenue Agency.
Interest and Penalties
Interest
Under Article 20 of the Italian Presidential Decree No. 602/1973, late payment interest is assessed at a rate of 4% per year. This interest rate applies to all taxes due in Italy, including VAT.
Penalties
Administrative penalties in Italy for non-compliance with VAT regulations include:
- Nonpayment or underpayment penalty of VAT is 30% but can be reduced to 15% or 10% if paid within a certain timeframe.
- Failure to submit an annual VAT return can result in a penalty of 120% to 240%.
- VAT return declared in a lower amount of VAT than is due, or if the VAT declared as deductible is higher than allowed will have a penalty of 90% to 180%.
- Failure to issue or record a tax invoice or failure to charge VAT can result in a penalty of 90% to 180% of the unpaid VAT.
Furthermore, if a supplier charges excessive VAT to a purchaser, the purchaser may also face an administrative penalty of 250-10,000 euros, even if they have a right to an input VAT deduction, except in cases of intentional tax fraud.
VAT Recovery
Under Italian VAT regulations, VAT taxpayers can offset the “input VAT” they’ve incurred on goods or services rendered in Italy, or those acquired or imported into the country, against the “output VAT”.
Refunds: Entities residing in Italy, non-resident businesses with a stable presence in Italy, and those non-resident entities that either designated a fiscal representative or registered directly for VAT can request VAT refunds. This can be done either in their annual VAT return or by filing a quarterly claim (using the VAT TR form) for the year’s initial three quarters. To qualify for a refund, the VAT due by the taxpayer must be a minimum of EUR 2,582.28, and the refund amount sought should exceed EUR 10.33.
For businesses not established and not VAT-registered in Italy, VAT refunds can be claimed based on:
- The EU 8th Directive for entities based within the EU.
- The EU 13th Directive for entities headquartered outside the EU.
Last Updated: 08/09/2023
Disclaimer
The information provided by Global VAT Compliance B.V. on this webpage is intended for general informational purposes only. Global VAT Compliance B.V. is not responsible for the accuracy of the information on these pages, and cannot be held liable for claims or losses deriving from the use of this information. If you wish to receive VAT related information please contact our experts at support@gvc.tax
