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Italy: New VAT measures, effective beginning 2018

Italy: New VAT measures, effective beginning 2018

Value added tax (VAT) measures that are part of the Budget Law 2018 (published in the official gazette on 29 December 2017) are generally effective 1 January 2018.


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Among the newly enacted VAT provisions are the following items.

  • Contrary to earlier plans for an increase in the VAT rate, the rate remains the same. There is no VAT rate increase in 2018.
  • Future VAT rate increases have been delayed until 1 January 2019.
  • Head-to-branch office charges will no longer be disregarded for VAT purposes when the head office (or the branch) belongs to a VAT group in Italy or in another EU Member State (thereby implementing the judgment of the Court of Justice of the European Union in the Skandia America case).
  • A new provision allows customers to recover VAT that was charged in error.
  • Electronic invoicing (e-invoicing) will be mandatory beginning 2019 for certain parties that are established or are VAT-registered in Italy.
  • Beginning in 2019, Italian VAT payers must file monthly reports of cross-border transactions.
  • Large retailers that had elected to make monthly transmissions of daily payment data can continue to follow this system up through 31 December 2018.
  • A new “web tax” on electronically supplied services, imposed at a rate of 3%, will be effective 1 January 2019.
  • Input VAT on purchases of fuel and oil (and other services related to transport) can be recovered for payments made by credit, debit or prepaid cards, effective 1 July 2018.
  • There are measures provided concerning how to recover VAT on pharmaceutical “paybacks.”
  • There are new VAT obligations for fuel removed from fiscal warehouses, effective 1 February 2018.


Read a January 2018 report [PDF 209 KB] prepared by the KPMG member firm in Italy

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