Value Added Tax (VAT), or IVA, is a tax levied on the goods and services that individuals purchase.
This consumption tax applies to every stage of production and distribution.
However, the burden of VAT ultimately falls on the end consumer, as businesses can reclaim the tax paid on purchases used in their production processes.
As of 2024, Italy has several VAT rates in place.
The standard VAT rate is 22%, applicable to most goods and services.
Reduced VAT rates are set at:
The 4% VAT applies to items such as specific cereals, medical appliances, and textbooks.
Meanwhile, the 5% rate includes essential children’s products and certain health-related services.
For more niche products like prepared foods and dining services, the 10% rate is relevant.
The ordinary VAT rate of 22% covers most purchases, including apparel, footwear, electronics, and home furnishings.
Understanding these distinctions is crucial for consumers and businesses alike, as they navigate pricing and compliance with tax regulations in Italy.
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