If you're planning to launch an e-commerce business in Italy, you need to understand the applicable tax and legal requirements from the start. In this article, we'll discuss the key tax obligations for e-commerce businesses, including applying for value-added tax (VAT) numbers, registering with the Business Register, as well as VAT compliance, product safety and consumer protection regulations.

What's in this article?

• Setting up a business before launching an online store
  
• Tax compliance for e-commerce once the business starts operating
  
• Changes applying to e-commerce taxes in 2025
  
• Regulations applicable to e-commerce in Italy
  
• VAT territoriality for e-commerce
  

Setting up a business before launching an online store

Before you start selling online in Italy, you must take some preliminary steps to set up a business that fully complies with the tax requirements pertaining to e-commerce.

• Apply for a VAT number
  The first step to launching an e-commerce business in Italy is to apply for a VAT number, which serves as a tax identification number. You'll need to select the Classification of Economic Activity (ATECO) code 47.91.10, which is the code for retail sale of any type of product through the internet. Then choose the tax regime best suited to your business.

• Register at the Chamber of Commerce
  Once you've obtained a VAT number, you must enrol in the local Chamber of Commerce's Business Register.

• Submit the Certified Notice of Business Start (SCIA)
  You must then submit the SCIA at the One-Stop Business Advisory Centre (SUAP) of the relevant municipality.

• Register with the Italian National Social Security Institute (INPS)
  If you launch an e-commerce business as a sole proprietor, you must register with the INPS under the category "Artisans and Traders" to pay social security contributions.

• Set up insurance with the Italian National Institute for Insurance against Accidents at Work (INAIL)
  If your business has employees or carries work-related risks, for example – if it involves warehouse activities – you must take out an insurance policy with INAIL, which provides coverage in case of workplace accidents or occupational diseases. This coverage safeguards both business owners and any employees.

What documentation is required to sell online?

Fortunately, e-commerce legislation in Italy offers a unified procedure for submitting all the documentation necessary to start your online sales business and fulfil your administrative obligations. Through the Comunicazione Unica (now accessible via the DIRE service), you can find the relevant forms to fill out: the form for the Business Register, the form for INPS, the form for INAIL, the form for the Revenue Agency and the SCIA form for SUAP.

Tax compliance for e-commerce once the business starts operating

Once you've set up an e-commerce business in Italy, you must comply with various tax obligations required to operate legally. Tax regulations pertaining to electronic invoicing, VAT, income tax and social security contributions differ based on your chosen tax regime – i.e. the flat-rate regime or the ordinary regime – and your economic activity type.

Electronic invoicing

In Italy, electronic invoicing is mandatory for nearly all VAT-registered businesses, regardless of their chosen tax regimes. Electronic invoices or e-invoices, must be issued in XML format using the appropriate e-invoicing software and then sent to the Agenzia delle Entrate’s Exchange System (Sdl). They should also be stored digitally in compliance with regulations for a period of 10 years. For business-to-business (B2B) transactions, issuing an e-commerce invoice is always required, whereas for business-to-customer (B2C) transactions, an invoice is not mandatory unless the customer requests it. However, daily sales must always be recorded in the relevant register.

Value-added tax (VAT)

For e-commerce businesses operating under the ordinary tax regime, VAT must be applied to all sales. VAT must be remitted periodically:

• Monthly: If annual revenue exceeds €800,000
  
• Quarterly: If annual revenue does not exceed €500,000 for service providers or €800,000 for retailers
  

Note that VAT paid on business purchases and expenses related to a business' activity can be deducted from the VAT it has charged to customers.

The ordinary tax regime also requires maintaining up-to-date accounting records (i.e. VAT sales register, VAT purchase register and register of payments received) and filing periodic tax returns as required by law, including VAT settlements, annual VAT returns and income tax returns.

Businesses operating under the flat-rate regime are not subject to VAT – VAT is not applied to their invoices, nor is it deducted from purchases.

Income tax

Under the ordinary regime, your economic activity is subject to the personal income tax (IRPEF), the corporate tax (IRES) if you are registered as a company and the regional production tax (IRAP). Under the flat-rate system, the IRPEF and any regional and municipal taxes are replaced by a substitute tax – typically at a 15% rate or 5% for the first five years of economic activity.

Social security contributions

E-commerce business owners are typically registered with INPS under the category "Artisans and Traders". Fixed social security contributions must be paid quarterly, regardless of income earned, up to a certain income threshold. Above this threshold, variable contributions apply, as a percentage of the income exceeding the threshold. INPS contributions must be paid under all tax regimes, including the flat-rate regime.

Changes applying to e-commerce taxes in 2025

Starting in 2025, some changes apply to e-commerce tax obligations in Italy, as well as some adjustments to legal and safety requirements. Here are key changes.

Digital Service Tax (DST)

Italy's 2025 Budget Law (Legge di Bilancio) has introduced changes to the Digital Service Tax (DST) or Digital Tax, which is part of the tax framework to which online businesses are subject. Prior to the 2025 Budget Law and in accordance with Section 1, paragraph 37 of Law 145/2018, companies that generated revenue from digital services in Italy were required to pay the Digital Tax if, in the prior year, their global revenue exceeded €750 million and, at the same time, they generated at least €5.5 million in revenue from digital services in Italy specifically. The 2025 Budget Law has removed the latter requirement – now businesses only need the global revenue of at least €750 million.

General product safety regulation (GPSR)

On 13 December 2024, Regulation (EU) 2023/988 of the European Parliament and of the Council on general product safety came into effect, imposing new requirements on e-commerce. Now, products – including those sold online – must comply with specific safety standards aiming to protect customers and ensure consistent standards across the EU. Businesses might need to make adjustments to meet these requirements.

Digital accessibility requirements

By 28 June 2025, all businesses must ensure that their digital products and services are accessible to individuals with disabilities, in compliance with the European Accessibility Act (EAA). This means implementing standards to make websites and e-commerce platforms accessible to all, regardless of their abilities.

Regulations applicable to e-commerce in Italy

In addition to meeting all the tax requirements pertaining to e-commerce, your business must comply with legal requirements related to consumer protection and personal data protection – they are part of a complex regulatory framework that includes commerce.

What legislation regulates online sales?

There is no single law governing online sales and prescribing tax requirements for e-commerce. Here are the collective laws that apply to online sales in Italy.

Legislative Decree No. 114/1998

Legislative Decree No. 114/1998, a trade reform law, does not include a dedicated section for e-commerce, but e-commerce is one of the special forms of retail sales listed in article 4, paragraph 1, which specifically refers to "sales through correspondence, television or other communication systems". The decree outlines the rules for commercial activities, including mail-order and online sales. It also requires anyone starting an e-commerce business to submit an SCIA to the relevant municipality at least 30 days prior to the start of operations, register with the Business Register and obtain a VAT number.

Legislative Decree No. 70/2003

Legislative Decree No. 70/2003, implementing e-commerce Directive 2000/31/EC, regulates information society services, including e-commerce. It imposes transparency obligations, which include providing the seller's identification information, terms and conditions and information about the technical processes involved in entering into an online contract. It also defines the responsibility of website operators with regard to the content and services they provide.

The Consumer Code in Italy

The Consumer Code (Legislative Decree 6 September 2005, No. 206) is the primary regulatory framework for online B2C sales. It requires sellers to give clear and up-front information about products, prices, payment methods, the right of withdrawal and legal guarantees. It also governs advertising, unfair commercial practices and alternative dispute resolution.

Presidential Decree (DPR) No. 633/1972

DPR No. 633/1972, together with its later amendments, is the legislation that governs VAT in Italy. Critical for ensuring compliance with e-commerce tax obligations, it prescribes how and when to apply VAT to online sales, distinguishing between domestic, intra-EU and extra-EU transactions, as well as between B2C and B2B transactions. It also covers invoicing requirements and simplified schemes, such as the One Stop Shop (OSS) for intra-EU distance sales.

General Data Protection Regulation (GDPR)

In addition to tax obligations, e-commerce businesses must comply with regulations relating to personal data protection. The GDPR (EU Regulation 2016/679) regulates the processing of consumers' personal data. Every e-commerce website must give its users clear information about how their data is collected, used and stored, specifying the purpose, legal basis, user rights and how to exercise those rights. It also requires the implementation of adequate security measures and, in some cases, the appointment of a Data Protection Officer (DPO).

General Conditions of Sale (GCS)

Articles 7, 12 and 13 of Legislative Decree No. 70/2003 and the Consumer Code require sellers to inform buyers of the General Conditions of Sale (GCS), which include legally-mandated information, such as business details and contacts, customer service information, payment methods, delivery and shipping terms, legal guarantee details and the right of withdrawal.

Cookie Policy

In Italy, the Privacy Code (Legislative Decree No. 196/2003), implementing the Directive on privacy and electronic communications 2002/58/EC along with the GDPR, regulates cookie policies on e-commerce websites. They mandate that websites clearly inform customers about the use of cookies – small text files saved on users' devices – which collect data about online activity to enhance the user experience or provide information to the website operators.

Websites must obtain the users' explicit consent before enabling non-technical cookies, such as profiling or third-party cookies. Technical cookies can be used without user consent, but they must be described in the cookie policy.

The Italian Data Protection Authority has issued specific guidelines on cookie usage, requiring an information banner upon first access of a site, a clear distinction between cookie types and the option for users to change their preferences at any time. Failure to comply with these rules can lead to penalties. Online sellers must therefore ensure not only e-commerce tax compliance but also adequate cookie management, in accordance with current regulations.

VAT territoriality for e-commerce

VAT is a key tax obligation for online business in Italy. Knowing where and how to apply VAT to sales is critical for proper e-commerce invoicing, tax law compliance and to avoid fines. VAT application depends on several factors, including whether the e-commerce activity is direct or indirect, the type of customer (i.e. B2B or B2C) and where the customer is located (i.e. within Italy, within the EU or outside the EU).

Difference between direct and indirect e-commerce

E-commerce falls into two main categories – direct and indirect – each with its own tax requirements.

• Indirect e-commerce: This type of e-commerce involves the online sale of physical goods – such as apparel, books or household products – that are purchased through the internet and shipped to the buyer's address through courier or delivery services.
  
• Direct e-commerce: This kind of e-commerce entails buying and selling non-physical goods, such as software, digital subscriptions, web domains or hosting services. In this case, the entire process – from the selection of the product to payment and delivery – happens online, with no physical goods being shipped. This distinction greatly impacts e-commerce VAT compliance, as we'll explore next.
  

VAT territoriality for indirect e-commerce

For VAT purposes, indirect e-commerce transactions are considered sales of goods and taxation is based on the type of customer (i.e. B2C or B2B) and where the customer is located (i.e. within Italy, within the EU or outside the EU).

Indirect B2C e-commerce

For indirect B2C e-commerce, the rules that apply depend on the customer's address.

Customers in Italy

For sales within Italy, VAT is applied based on the rate prescribed for the specific product under law in Italy; the standard VAT rate is currently 22%, with reduced rates for some goods such as food or books.

Customers in other EU countries

For customers located in other EU countries, sales are considered intra-EU distance sales. The general rule is that VAT is applied in the destination country, meaning where the customer lives. However, if the seller is based in a single EU member country, is not registered under the OSS scheme and the total revenue for their intra-EU distance sales remains under €10,000 (excluding VAT) per year, VAT in Italy can still be applied. This limit, known as the protection threshold, simplifies VAT obligations for small businesses. As a key tax e-commerce obligation, it requires careful attention.

If this threshold is exceeded in the current or prior year, the seller must apply the VAT rate of the customer's country. In this situation, the seller can either register in each destination country or streamline VAT management by registering under the OSS scheme, which allows them to report and pay VAT in different member countries through a single periodic return filed in their own country.

Customers outside the EU

Sales to customers outside the EU are considered exports and are therefore VAT-exempt under article 8 of DPR No. 633/1972. To benefit from this exemption, it's critical to keep customs records proving that the goods left the EU – this online commerce tax requirement should not be overlooked.

Indirect B2B e-commerce

For indirect B2B e-commerce – i.e. sales to VAT-registered businesses – the rules are different from B2C transactions.

• Intra-EU B2B sales
  If the customer is a VAT-registered business in another EU country and provides a valid VAT number, the sale is treated as VAT-exempt in Italy. The customer must pay VAT in their own country using the reverse charge mechanism, meaning they would report the purchase locally and pay applicable VAT there.

• B2B sales outside the EU
  Exports are VAT-exempt under article 8 of DPR No. 633/1972; therefore, customers that are businesses outside the EU do not pay VAT. However, to utilise this exemption it's essential to retain customs declarations showing that the goods have actually left the EU.

VAT territoriality for direct e-commerce

In the case of direct e-commerce services – meaning the sale of digital goods, such as software or multimedia content – VAT is charged in the destination country, where the customer receives the service. This is true regardless of the seller's location, whether inside or outside the EU and whether it's a B2B or B2C sale.

The difference between B2B and B2C doesn't impact where VAT is applied, but it affects how it's managed. Being aware of this rule is key to staying compliant with tax obligations for online commerce.

B2B sales

For B2B sales, the seller issues a VAT-free invoice – under article 7-ter of DPR No. 633/1972, the transaction is not subject to VAT in the seller's country. The purchasing business must then record the received invoice and pay the VAT using the reverse charge mechanism. In practice, this means that the buyer is then responsible for paying VAT.

B2C sales

For B2C sales, the seller, regardless of whether they're based in the EU or not, is responsible for paying VAT. To do so, they must be VAT-registered in the EU country where the customer is located. Fortunately, the OSS scheme streamlines the process by allowing the seller to pay VAT for all applicable EU countries through a single platform.

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