What Is the VAT in Italy?

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The VAT in Italy is a tax on goods and services.
The VAT in Italy is a tax on goods and services. (Image: made in italy 2 image by Alberto Cera from Fotolia.com)

The VAT in Italy is the value-added tax. It is an indirect tax on all business transactions involving goods and services, and is also known as "imposta sul valore aggiunto" or IVA.

History

The value-added tax was introduced in 1954 by French economist Maurice Laure. The VAT is applicable for all countries in the European Union and is different for each country.

Rates

In 2010, Italy's VAT for business transactions and purchases was 20 percent, and the tax for basic products 4 to 10 percent. A tax of 4 to 8 percent was also levied on assets.

Who Pays the VAT

The VAT is only paid by European Union consumers. Non-EU citizens who spend more than 180 Euros in goods at one time will receive a reimbursement of the tax.

Exemptions

Suppliers and distributors of goods may deduct the input VAT. Exported goods are also exempt from taxation.

Refunds

Italy's VAT may subject to refund. VAT returns are submitted on a monthly basis, and at the end of the financial year March 15.

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