The Italian government has just announced that the standard VAT rate will rise from 22% to 25% as of 01 January, 2018. Also, there will be an additional increase of 0.9% which will be made on 01 January, 2019, which will bring the standard VAT rate in Italy to 25.9% from the beginning of 2019. This will be the second highest in the EU, only after Hungary at 27%. In addition, the reduced VAT rate is expected to rise from 10% to 13% from 01 January, 2018.

In 2016, the Italian government cancelled a planned rise of VAT rates from 22% to 24%, which was due to start from 01 January, 2017. amavat Europe^® suggests waiting until these recently advised VAT rate changes are confirmed later in the year, to avoid having to reverse your system updates.

The so-called ‘stability law’ was announced by the Italian government and these rate changes were part of that. From the expected revenue collection for this VAT increase, the government should see increases to €20 billion for 2018 and €23.2 billion in 2019.

From the implementation date these VAT rate changes require ERP systems to be modified and all invoices to be dispensed with the correct rate. Businesses should look at the reporting rules on credit notes when terminating old VAT rate invoices, tax point rules to define which rate relates and invoicing rules in Italy.

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