Italy’s New Consolidated VAT Law: Key Reforms Ahead

Implementation and Objectives: The Council of Ministers in Italy has granted preliminary approval for a legislative decree introducing the new Consolidated VAT Law, set to take effect on January 1, 2026. This reform aims to unify and streamline the fragmented VAT regulations that have persisted for decades.
Increased Compliance Obligations: The new law will introduce several new concepts and increase obligations for both domestic and foreign taxable persons, requiring businesses to familiarize themselves with the updates to ensure compliance.
Key Changes and Innovations: Significant changes include a modernized system for export documentation, enhanced transparency in e-invoicing and digital reporting, and mandatory digital reporting of daily summaries for physical stores, all designed to simplify VAT compliance for businesses operating in Italy.

Consolidated VAT Code Approved: The Italian Council of Ministers has approved a preliminary draft for a Consolidated VAT Code, set to take effect on January 1, 2026, aimed at unifying existing VAT regulations into a single comprehensive document.
Integration of Existing Regulations: The new code integrates various existing regulations, including Presidential Decree 633/72 and Decree Law no. 331, into a unified framework of 171 articles, aligning with the EU VAT Directive and addressing both national and intra-community operations.
Key Updates Introduced: The code modernizes the evidentiary regime for export VAT non-taxability, consolidates rules for electronic invoicing, incorporates digital reporting requirements for daily receipts and pre-filled VAT returns, and includes refinements to the VAT rate tables, necessitating updates in invoicing and accounting procedures for businesses.

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