Click HERE for the Draft version of the VAT law applicable as of January 1, 2026
Italy is introducing a comprehensive new consolidated VAT Code (“Testo Unico IVA – TU IVA”), replacing the fragmented framework that has existed for over 50 years. The reform unifies all major VAT provisions—previously found in multiple decrees and amended countless times—into a single, streamlined, EU‑aligned legal structure. It modernizes the VAT system, embeds digital compliance tools, and resolves long‑standing inconsistencies between domestic and EU rules.
Key Business-Relevant Changes
A. Consolidated, Simplified VAT Framework
The new Code restructures the entire VAT system into a clear format of 171 articles across 18 titles, mirroring the EU VAT Directive. This eliminates conflicting interpretations and simplifies navigation for tax and finance teams.
B. Digitalization Integrated into Law
Italy’s digital compliance infrastructure is now formally embedded in VAT legislation, including:
- Mandatory e‑invoicing
- Telematic daily receipts reporting
- Pre‑filled VAT returns
This creates a stable legal basis for digital processes and prepares the country for future EU digital reporting mandates.
C. New Export Documentation Rules
All export evidence must now be provided exclusively through the Automated Export System (AES). Traditional paper-based documents are no longer valid, requiring operational updates for supply chain and customs teams.
D. Updated Definitions and VAT Treatment
- “Supply of goods” is revised to better reflect economic substance rather than civil‑law ownership transfer.
- Real estate and financial service exemptions are clarified, with improved options for taxation to reduce ambiguity.
- Digital services receive updated place‑of‑supply rules tailored for streaming, online events, and cross‑border digital activity.
E. Broader Rationalisation
The Code incorporates numerous amendments from past decades—including sector‑specific rules (e.g., art and antiques)—ensuring a coherent and unified legal structure for all industries.
3. Timeline & Current Status
Already Completed
- Draft approved by the Government in preliminary form (July 2025)
- Transmitted to Parliament (September 2025)
- Parliamentary committees issued favourable opinions (September–October 2025)
- Approved in final examination by the Council of Ministers (22 December 2025)
Pending
- Official publication in the Gazzetta Ufficiale
- Entry into force: originally planned for 1 January 2026, but a postponement to late 2026 is possible due to timing of publication and administrative completion
Bottom Line
The law is completed and approved, but not yet legally in effect until publication occurs.
Version applicable till January 1, 2026
Full text of the Italian VAT Law, Decreto del Presidente della Repubblica n. 633/1972, from Normattiva: This is the official Italian legal portal that provides the consolidated and updated version of the law.
Source Normattiva.it
See also
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