Italy VAT (IVA) Explained 2026: Rates, Calculation and Who Is Exempt
Italian VAT (IVA) has four rates in 2026: a standard 22% rate, a 10% reduced rate for hospitality, renovation and certain goods, a 5% rate for specific social cooperative services, and a 4% super-reduced rate for essential foodstuffs and other listed items. The 2026 Budget Law (L.199/2025) made no changes to any VAT rate. Forfettario-regime taxpayers do not charge or remit VAT.
The Four Italian VAT Rates in 2026
The standard rate is 22%, applying to all taxable supplies of goods and services not covered by a reduced category (DPR 26 ottobre 1972 n. 633 Art.16 para.1, VERIFIED). The 10% reduced rate (Tabella A Parte III) covers: restaurant services, hotel accommodation, residential building renovation, medicines, domestic electricity supply, and agricultural products. The 5% rate (Tabella A Parte II-bis) applies to services provided by social cooperatives to vulnerable persons and elderly-care services. The 4% super-reduced rate (Tabella A Parte II) covers basic foodstuffs, books, newspapers and periodicals, first-home residential construction, and equipment for disabled persons. The 2026 Budget Law (L.199/2025) left all four rates unchanged.
How to Add or Extract VAT: Net-to-Gross and Gross-to-Net
To add VAT to a net (pre-tax) price: gross = net x (1 + rate); VAT amount = net x rate. Example at 22%: €100.00 x 1.22 = €122.00 gross; VAT = €22.00. To extract VAT from a VAT-inclusive gross price: net = gross / (1 + rate); VAT = gross minus net. Example: €122.00 / 1.22 = €100.00 net; VAT = €22.00. At the 10% rate: €110.00 / 1.10 = €100.00 net and €10.00 VAT. All amounts are rounded to two decimal places. Use the paycalceu.com VAT calculator for instant net-gross conversion at any Italian rate.
Recent Changes to Reduced VAT Categories
Recent budget laws have moved some product categories between VAT tables. L.213/2023 (2024 Budget Law, Art.1 c.45) moved infant formula (item 65), feminine hygiene products (item 114.1), and children's diapers (item 114.2) from Tabella A Parte II-bis (5%) to Parte III (10%), effective 1 January 2024. L.207/2024 (2025 Budget Law, Art.1 c.49) added urban and special waste collection and sewage treatment to Tabella A Parte III (10%). L.199/2025 (2026 Budget Law) made no further VAT changes.
Exempt, Zero-Rated and Out-of-Scope Transactions
DPR 633/1972 distinguishes several categories from ordinary taxable supplies. Exempt transactions (Art.10) — including medical services, financial operations, insurance, and residential property rental — do not carry VAT but follow specific rules on input VAT deductibility. Non-taxable transactions (mainly exports and intra-EU supplies) allow full input VAT deduction. Out-of-scope transactions (sales of non-building land, transfers of entire business complexes) fall outside the VAT system entirely. The classification of any specific transaction should be verified with a commercialista or tax adviser, as misclassification carries penalty risk.
Forfettario Taxpayers and VAT: No Obligation
Forfettario-regime taxpayers (L.190/2014) are fully exempt from charging and remitting VAT. Their invoices must carry the statutory exemption statement and must not include a VAT line; input VAT on purchases cannot be deducted. If revenues exceed €100,000 during the year, the forfettario regime exits immediately at the breaching transaction and VAT becomes retroactively due on subsequent transactions in that year. The regime is particularly advantageous when dealing with final consumers or buyers who cannot recover input VAT, as the gross price equals the net price with no VAT surcharge.
FAQ
What is the standard Italian VAT rate in 2026?
The standard rate is 22%, applicable to all taxable supplies of goods and services not covered by the reduced categories (DPR 633/1972 Art.16, VERIFIED). The 2026 Budget Law (L.199/2025) made no changes to any VAT rate.
Which goods qualify for the 4% super-reduced VAT rate?
The 4% rate applies to basic foodstuffs, books, newspapers and periodicals, first-home residential construction, and equipment for disabled persons, as listed in Tabella A Parte II annexed to DPR 633/1972.
How do I calculate VAT from a gross (VAT-inclusive) price?
Divide the gross price by (1 + VAT rate). At 22%: €122.00 / 1.22 = €100.00 net and €22.00 VAT. At 10%: €110.00 / 1.10 = €100.00 net and €10.00 VAT.
Do forfettario-regime freelancers charge VAT on their invoices?
No. Forfettario taxpayers are fully exempt from collecting and remitting VAT under L.190/2014. Their invoices must state the exemption and cannot include a VAT line; input VAT on purchases is not deductible.
⚠️ Informational estimate, not tax advice. Payroll software may differ in edge cases. Verify with a professional.