Italy: VAT rate increases in draft budget law 2018 | KPMG | GLOBAL

Italy: VAT rate increases delayed in draft budget law 2018

Italy: VAT rate increases in draft budget law 2018

The draft budget law 2018, expected to be approved by the end of 2017 and effective beginning 2018, includes measures that would change the rates of value added tax (VAT) beginning in 2019.

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VAT rate increases delayed until 2019

In October 2017, VAT rate increases were scheduled under Law Decree no. 148/2017 to be effective 1 January 2018. However, the draft budget law 2018 does not provide for VAT rate increases in 2018. Instead, the draft budget law postpones a gradual increase in the VAT rates to 1 January 2019.

The schedule for the VAT rate increases are proposed to be:

 

The “reduced” 10% VAT rate would increase:

  • From 10% to 11.5% as of 1 January 2019
  • From 11.5% to 13% as of 1 January 2020

 

The “standard” 22% VAT rate would increase:

  • From 22% to 24.2% as of 1 January 2019
  • From 24.2% to 24.9% as of 1 January 2020
  • From 24.9% to 25% as of 1 January 2021

 

These VAT rate increases, however, would not apply if certain budgetary targets are met.

 

Read a November 2017 report [PDF 175 KB] prepared by the KPMG member firm in Italy

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