Properly managing value-added tax (VAT) on beverages in Italy is important for those working in the food and beverage sector. Rates depend on the type of beverage (e.g., alcoholic, nonalcoholic, or water) and the sale method: sale or supply. This means that the same beer, wine, or soft drink could be subject to 22% or 10% VAT, depending on whether it is sold to take away or consumed on the premises.

This article provides an overview of VAT regulations on beverages, including the differences between sale and supply and VAT rates for alcoholic beverages, soft drinks, and water. We also discuss special cases, obligations for bars, restaurants, and ecommerce, and the most common mistakes. We provide a clear and practical framework for correctly applying VAT in your business.

What’s in this article?

• Overview of VAT regulations on beverages in Italy
  
• Differences between sale and supply and why VAT changes
  
• VAT rates for different types of beverages
  
• Exceptions to the 10% VAT rate: Supply in cafeterias
  
• VAT obligations for bars, restaurants, and ecommerce
  
• Common mistakes when managing VAT on beverages
  
• How Stripe Tax can help
  

Overview of VAT regulations on beverages in Italy

VAT regulations in Italy are based on Presidential Decree No. 633/1972. This decree regulates VAT and establishes VAT rates for various goods and services, including beverages. From a legal standpoint, relevant transactions can include the following:

• Sales of goods: Discussed in Article 2 of Italian Presidential Decree No. 633/1972
  
• Provisions of services: Discussed in Article 3 of Italian Presidential Decree No. 633/1972
  

This distinction is important for managing VAT on beverages. Supplying food and drinks is considered a service, while takeout or ecommerce sales are considered sales of goods.

In Table A, Part III, No. 121 of Presidential Decree No. 633/1972, the reduced VAT rate applicable to supply shows 10% VAT on food and beverage services. However, when beverages are sold as goods (e.g., for takeout or via ecommerce), the transaction constitutes a sale. The standard VAT rate of 22% applies, unless specific concessions are provided for by law.

What is the VAT rate on beverages in Italy?

VAT on beverages in Italy depends on the method of sale. The rate is 22% for sales and 10% for supplies. However, in company and school cafeterias, the reduced rate of 4% applies.

Differences between sale and supply and why VAT changes

To correctly apply VAT on beverages in Italy, the first step is to understand the differences between the sale of goods and the supply of food and beverages. This is a legal distinction provided for by Presidential Decree No. 633/1972. This distinction has direct consequences on the applicable VAT rate, even when the product is identical.

Sale of beverages

The sale of beverages occurs when it exclusively concerns the goods. This means it does not include relevant ancillary services. For instance, this is the case for the sale of the following:

• Bottles of wine from a wine store
  
• Beer or soft drinks purchased as takeout
  
• Mineral water sold in grocery stores or via ecommerce
  

In these situations, customers purchase the product and can consume it wherever they prefer. From a VAT perspective, the transaction falls under the sale of goods referred to in Article 2 of Presidential Decree No. 633/1972, and the relevant tax rate is the one applicable to the goods. For most beverages, the standard 22% VAT rate applies.

Supply of beverages

On the other hand, the supply of beverages occurs when the sale takes place within the context of a service organized for immediate consumption on the premises. In this case, the beverage is sold and a set of necessary ancillary services is also provided, such as the following:

• Use of the premises
  
• Table service or counter service
  
• Staff
  
• Crockery, glassware, and infrastructure
  

Because of the presence of these elements, the supply is classified as a service provision, according to Article 3 of Italian Presidential Decree No. 633/1972. VAT legislation provides preferential treatment for these transactions, and the reduced rate of 10% applies.

Differences in rates for sales and supplies

The distinction between sale and supply has a significant practical consequence for companies in the food and beverage sector. The same beverage can be subject to different VAT rates depending on whether it is sold for takeout or consumed on the premises, as illustrated in the table below.

Same beverage, different VAT rates

VAT rates for different types of beverages

Once a business clarifies the distinction between the sale of goods and the supply of food and beverages, VAT treatment for different types of beverages becomes easier to interpret. In the Italian system, VAT rates for supplied beverages are the same. However, the rate applied to sales of beverages is that of the product itself.

Alcoholic beverages

Alcoholic beverages—such as beer, wine, and spirits—do not benefit from reduced VAT rates based on the type of product. The applicable rate depends on the method of sale: 22% for sales and 10% for supplies.

Nonalcoholic beverages, soft drinks, and water

For nonalcoholic beverages—including soft drinks, juices, and energy drinks—the VAT rate also depends on the nature of the transaction: sale or supply. The same principle also applies to water.

Exceptions to the 10% VAT rate: Supply in cafeterias

Under Italy’s VAT system for beverages, supplies are generally subject to a 10% rate. However, there is a specific exception provided for by Presidential Decree No. 633/1972: the supply of food and beverages in company and school cafeterias and other similar facilities.

Supply of beverages in company and school cafeterias and similar facilities

One of the main exceptions to the VAT rate concerns these locations. For them, the reduced 4% VAT rate applies, not the standard 10% rate applicable to most supplies.

This is outlined in No. 37 of Table A, Part II, which is attached to Presidential Decree No. 633/1972. It provides for a 4% rate for: “the supply of food and beverages in company and intercompany cafeterias, in cafeterias of any type of school, as well as in soup kitchens, even if carried out on the basis of contracts or agreements.”

For example, this reduced rate applies to the following:

• In-house or outsourced company cafeterias
  
• School cafeterias
  
• University cafeterias
  
• Cafeterias for welfare or social facilities
  

The aim of the law is to facilitate collective catering services for workers, students, or specific categories.

It is important to note that this reduced rate applies only if the supply takes place in the context of the cafeteria. It does not automatically extend to other ancillary services or ordinary catering services provided on the same premises.

VAT obligations for bars, restaurants, and ecommerce

If a business sells beverages, it must comply with specific VAT obligations regarding the application of the correct tax rate and management of tax compliance. Below, we outline these obligations.

Bars and restaurants

Bars and restaurants must do the following:

• Distinguish between supply and sale. Drinks consumed on the premises are subject to 10% VAT. Those sold for takeout are classified as sales and are generally subject to 22% VAT.
  
• Set up the cash register to associate each transaction with the appropriate VAT rate.
  
• Issue a commercial document (e.g., receipt) or invoice, if the customer requests it.
  
• Include all transactions in periodic VAT payments and annual VAT returns.
  

Ecommerce

Businesses that sell via ecommerce must do the following:

• Remember that a sale constitutes a transfer of goods, so 22% VAT typically applies.
  
• Apply the correct VAT rate based on the customer’s country, especially in cross-border sales.
  
• Apply the VAT rate of the customer’s country, if the business sells to customers in other EU countries and exceeds the threshold. Use the One Stop Shop (OSS) scheme to declare and pay VAT due in different member states through a single registration. This avoids having to register for VAT in each country.
  
• Keep sales records, and ensure correct registration for tax purposes.
  

Common mistakes when managing VAT on beverages

Managing VAT on beverages in Italy might seem simple. However, in practice, many business operators make mistakes that can lead to tax irregularities, accounting adjustments, or penalties. The most frequent mistakes concern the classification of the transaction and the correct application of the tax rate.

The most common mistakes include the following:

• Businesses don’t distinguish between sales and supply and apply the same rate to all sales. For instance, the business applies 10% to beverages sold for takeout or 22% to beverages consumed on the premises.
  
• Businesses don’t correctly set up the cash register. This happens when they don’t properly separate transactions subject to different tax rates.
  
• Businesses apply the wrong tax rate for online sales, especially when selling beverages to customers in other EU countries where different rules apply based on the customer’s location.
  
• Businesses mistakenly equate VAT with other taxes, such as excise duties on alcoholic beverages. These are separate taxes that do not affect the applicable VAT rate.
  
• Businesses fail to properly update billing or cash register systems and continue to apply settings that are inconsistent with current regulations or sales models (e.g., introducing takeout without updating tax rates).
  
• Businesses don’t keep adequate records, making it more difficult to prove the correct application of VAT in the event of audits.
  

These mistakes are particularly common in businesses that operate across multiple channels, such as bars that sell beverages both for on-premises and takeout consumption or companies that combine in-store sales with ecommerce. Using automated systems for VAT calculation and management can significantly reduce the risk of error and ensure greater tax compliance.

How Stripe Tax can help

Correctly applying VAT to beverages—as with any other type of online food sales—requires attention to several factors. These include the distinction between sale and supply, sales channel (in-store or ecommerce), and customer’s location. This complexity increases further if you sell online or operate in multiple countries, where tax rules and rates can vary.

Managing these aspects manually can increase the risk of errors and make tax compliance more complex, especially for growing businesses. For this reason, many companies use automated solutions that allow them to correctly calculate, apply, and collect VAT based on the type of product and transaction.

Stripe Tax reduces the complexity of tax compliance so you can focus on growing your business. Start collecting taxes globally by adding a single line of code to your existing integration, clicking a button in the Dashboard, or using our powerful API.

Stripe Tax helps you monitor your obligations and alerts you when you exceed a tax registration threshold based on your Stripe transactions. It can also register to collect tax on your behalf in the US and manage filings through trusted partners. Stripe Tax automatically calculates and collects sales tax, VAT, and GST on:

• Digital goods and services in all US states and more than 100 countries
  
• Physical goods in all US states and 42 countries
  

Stripe Tax can help you:

• Understand where to register and collect taxes: See where you need to collect taxes based on your Stripe transactions. After you register, switch on tax collection in a new state or country in seconds. You can start collecting taxes by adding one line of code to your existing Stripe integration, or add tax collection with the click of a button in the Stripe Dashboard.

• Register to pay tax: If you need to register for a sales tax in the US, let Stripe manage your tax registrations. You’ll benefit from a simplified process that prefills application details—saving you time and simplifying compliance with local regulations. If you need help registering outside of the US, Stripe partners with Taxually to help you register with local tax authorities.

• Automatically collect tax: Stripe Tax calculates and collects the right amount of tax owed, no matter what or where you sell. It supports hundreds of products and services and is up-to-date on tax rules and rate changes.

• Simplify filing: Stripe Tax seamlessly integrates with filing partners, so your global filings are accurate and timely. Let our partners manage your filings so you can focus on growing your business.

Learn more about Stripe Tax, or get started today.