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