Italy Reverse IVA Calculator.

Italy's VAT system, known as Imposta sul Valore Aggiunto (IVA), has a standard rate of 22% — one of the higher standard VAT rates in the EU. Italy has operated a VAT system since 1973. The high standard rate reflects Italy's significant dependence on indirect taxation and a relatively large informal economy that VAT is designed to counter through its cross-checking paper trail.

Italy has four IVA rates. The standard 22% rate applies to most goods and services. A reduced 10% rate applies to hotel accommodations, restaurants, certain food products (not in their raw unprocessed form), and passenger transport. A further reduced 5% rate applies to certain social services, health care services, and some food supplements. The lowest rate of 4% applies to basic necessities including most food items, books, newspapers, and medical devices.

Italy's IVA compliance has historically been challenged by widespread tax evasion and the cash economy. The Italian government has introduced several measures to combat this, including: the mandatory electronic invoicing (fatturazione elettronica) system introduced in 2019 for B2B transactions, which requires all invoices to be issued through the government's Sistema di Interscambio (SdI) platform; reduced IVA rates for payment by credit card; and enhanced audit powers for the Agenzia delle Entrate (Revenue Agency).

Italy's VAT registration threshold for established businesses is €65,000 annually. Non-established businesses have no threshold and must register before making their first supply. Italy has been particularly strict about VAT registration enforcement for non-EU e-commerce platforms selling to Italian consumers.

For tourists from outside the EU, Italy offers a VAT refund scheme (Tax Free Shopping) on purchases above €154.94 per retailer. Retailers issue a Tax Free form; customs must stamp it at departure; refunds can be collected at the airport, by credit to your card, or by post.