- Italy is undergoing a major VAT reform to align with EU VAT principles.
- The reform aims to ensure compliance with EU directives, increase legal certainty, simplify compliance, and improve market functioning.
- The Italian government received the authority to revise VAT legislation with deadlines for implementation by August 2025 and completion by December 2025.
- A new consolidated VAT code with 171 articles was preliminarily approved in July 2025.
- The reform addresses conflicts between Italian and EU VAT laws, particularly with Council Directive 2006/112/EC.
- Key changes include the scope and conditions for VAT application, focusing on economic substance over legal form.
- The reform revises VAT exemptions, especially in real estate and financial sectors, and introduces an option to tax mechanism.
- The reform seeks to clarify definitions of exempt activities and align with EU case law.
Source: vatabout.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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