Italy: New VAT measures, effective 2018 | KPMG Global
Share with your friends

Italy: New VAT measures, effective 2018

Italy: New VAT measures, effective 2018

Law Decree no. 148/2017, published in the official gazette on 16 October 2017, includes value added tax (VAT) measures, including provisions for the extension of the split-payment regime and relating to changes to the rate of VAT.


Related content

Split-payment extension

Effective 1 January 2018, the split-payment regime will be extended to supplies of goods and services rendered to additional categories of public bodies (such as public economic bodies, special companies, foundations, etc.) and their “subsidiaries.” The decree further clarifies that non-Italian corporations listed on the Italian stock exchange (Borsa Italia) are subject to the split-payment regime only if registered for Italian VAT purposes.

An implementing decree is expected by the end of November 2017.

VAT rate changes

The decree revises a scheduled increase to the 10% “reduced rate” of VAT (as scheduled under the Financial Bill for FY 2017). The new schedule for the phase-in of the increase to the “reduced rate” of VAT is as follows:

  • Increase from 10% to 11.14% effective 1 January 2018
  • Increase from 11.14% to 12% effective 1 January 2019
  • Increase from 12% to 13% effective 1 January 2020

The decree does not affect scheduled phase-in changes (also under the Financial Bill for FY 2017) to the “standard rate” of VAT. Therefore, the “standard rate” of VAT will be:

  • Increased from 22% to 25% effective 1 January 2018
  • Increased from 25% to 25.4% effective 1 January 2019
  • Reduced from 25.4% to 24.9% effective 1 January 2020
  • Increased from 24.9% to 25% effective 1 January 2021

These VAT rate changes will not be triggered if certain budgetary targets are met. According to a government release (16 October 2017), it is anticipated that the increases to the standard and reduced rates of VAT would be “neutralized” by the Financial Bill for FY 2018, expected to be approved by the end of FY 2017.


Read an October 2017 report [PDF 166 KB] prepared by the KPMG member firm in Italy

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Request for proposal