Italian VAT number – what is it and who needs it?

Italian VAT number

In order to become a successful business owner, it is absolutely necessary to be judged as qualified by tax authorities and one of the most basic steps is to possess a VAT number. Value-added tax is of absolute necessity not only for VAT returns but also to deal with various procedures. After all your life as entrepreneur will never be smooth if you fail to cooperate with Tax Office. Having your VAT registered is an absolute necessity in the modern world business industry, which at this point has become a common sense. In this article we will provide you with a brief introduction of VAT in Italy.

VAT number in practice

Value-added tax (VAT) or Imposta sul Valore Aggiunto (IVA) in Italian language is a tax that brings along with it an identification number unique for each country. It is required for all VAT purposes and is in use in many countries including member states of the European Union. Your taxable supplies will require you to pay VAT and that is just one of many uses your VATIN (VAT identification number) has. It is important to remember that validity of your number can be checked by others, which is far easier within EU than elsewhere – more about this matter later.

When is it required?

Since July 1st 2021 if value of the goods traded between EU countries did not exceed the threshold of 10,000 EUR, the entrepreneur would pay VAT in his country of residence. Above that value is when the VATIN in every EU country where the transactions take place is required. Not only is VAT registration necessary, a local legal representative might also be a necessity in order to complete the process smoothly. This leads to the slightly confusing occurrence where European commissions might require a fiscal representative to handle VAT registrations across multiple countries. To sum it up – to complete Italian VAT procedures you will need VATIN issued by appropriate Tax Office, which in turn will allow you to store your goods within the territory of that country.

Italian VAT

Should you decide to begin business in Italy it will be required of you to apply for Italian VAT number, which will be needed to complete VAT procedures in this country. It is composed of 2 letters and 11 digits signifying country code and the unique number representing company. Non-resident traders might apply for their VAT numbers through website of Italian tax authorities at the following address: Dipartimento Finanze

Italian authorities operate only in Italian language, which might pose some difficulty to entrepreneurs lacking skill in this aspect, which is one of the cases where local legal representative might prove to be extremely useful. Another point requiring attention are VAT registrations – different countries have their own regulations, which is bound to cause trouble to newcomer. Non-EU businesses are required to have an Italian fiscal representative but owners of permanent establishments in EU should also consider it as a valid option as the trouble involved in doing it themselves might not be worth the effort especially when the operations extend over more and more countries. Abiding by the laws is not as simple as it might seem at first and it only gets more complicated as more and more regulations get involved. This is where one might find it necessary to make use of VAT compliance services in order to get registration sorted out, like in this case the Italian VAT registration.

After registration comes the matter of VAT returns, which need to be filed monthly, if turnover is over 400,000 for service providing companies and over 700,000 for ones involved in goods. Below that value they are required quarterly, while annual returns are obligatory for all. Beware of time schedule as validating your application for registering VAT might take several weeks.

VATIN Database

Sometimes it is necessary to check validity of other company’s VATIN and in order to do so certain steps need to be taken. All numbers issued in the member states of the EU are included in the database VIES, which allows checking for validity with ease, however in case of countries outside this classification it is necessary to apply to the appropriate Tax Administration with request for verification.