Italy: VAT changes in legislation

 Posted by Jennifer Flanagan

 Wednesday 02 August 2017

The Italian VAT Authorities recently announced changes in legislation in relation to VAT, to include the following:

Reduction in the time frame to reclaim input VAT.

Under the legislation passed in June 2017 the Italian Authorities have reduced the time frame in which input VAT can be claimed. Under the legislation recently passed, input VAT for purchase invoices issued from 1st January 2017 onwards can only be recovered up until 90 days after the submission deadline of the annual VAT return for the year in which the input VAT became deductible. (i.e Purchase invoice relating to 2017 should be reclaimed before the submission deadline of the annual VAT return on the 30th April 2018, with the possibility of an additional 90 days if an amended annual VAT return is filed.)  Previously input VAT could be recovered through the annual VAT return up until the second year after the year in which the input VAT became deductible.

Possible changes in VAT rates

The Italian Authorities have also announced that there will be increases in VAT rates over the next four years from 2018 to 2021 if certain budgetary targets are not met.

If budgetary targets are not met VAT rates will change as follows:

Standard VAT rates

January 2018 - An increase from 22% to 25%

January 2019 - An increase from 25% to 25.4%

January 2020 - A decrease from 25.4% to 24.9%

January 2021 - An increase from 24.9% to 25%

Reduced VAT rates

January 2018 - An increase from 10% to 11.50%

January 2019 - An increase from 11.5% to 12%

January 2020 - An increase from 12% to 13%

ITALY (IVA)


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