- Effective January 1, 2026, Italy has implemented a new automated procedure to enhance VAT enforcement for omitted annual VAT returns, allowing tax authorities to calculate owed VAT using data from the e-invoicing and digital VAT reporting ecosystem, as established by the 2026 Budget Law.
- When an annual VAT return is either omitted or unusable, the Italian Revenue Agency can now leverage existing digital transaction data, including e-invoices and telematic receipts, to assess the VAT due and issue a formal notice to the taxpayer, who will have 60 days to either pay the assessed amount or provide corrections before collection actions commence.
- Taxpayers who pay within the 60-day notification period can benefit from a penalty reduction to one-third of the assessed amount, while any corrections leading to a revised assessment will reset the 60-day response period, highlighting the critical role of e-invoicing data quality in ensuring compliance and facilitating automated enforcement.
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