Output value-added tax (VAT) is a key concept for any business operating in Italy. This is the levy that businesses charge customers on behalf of the state and must later remit to the treasury. This article will explain in detail what output VAT is, how it is calculated, and the methods and deadlines for paying it.

What's in this article?

• What is output VAT?
  
• What's the difference between output and input VAT?
  
• How do you calculate output VAT?
  
• What are the VAT rates in Italy?
  
• How and when do you pay output VAT?
  

What is output VAT?

Output VAT is the amount a VAT-taxable person collects when selling a good or service. The portion is referred to as VAT on sales because, after receiving it, the business is obligated to pay it to the government. For example, if you sell a printer for €100 plus 22% VAT (€22), that €22 is output VAT. You must remit this amount to the state, which is a tax liability.

What's the difference between output and input VAT?

While output VAT is the amount taken in on sales invoices, input VAT is the levy paid when purchasing goods and services. For instance, if you buy a desk for €366, including €66 in VAT, that €66 is input or credit VAT. Since you have paid this amount, a credit with the treasury is created.

How do you calculate output VAT?

You might be wondering how to work out the total owed. To determine output or input VAT, you need to assess the portion on supplier purchases (input VAT) and on customer sales (output VAT) for the reporting period.

If in February you purchased products from suppliers for €15,000 plus 22% VAT and sold products to customers for €19,000 plus 22% VAT in the same month, you will have:

Since the output VAT is higher than the input, you must pay €880 to the Italian Revenue Agency.

What are the VAT rates in Italy?

What are the current VAT rates in Italy? In 2025, Italy's standard percentage will remain 22% and apply to most goods and services. However, certain offerings are subject to reduced rates of 4%, 5%, and 10%. You can find the complete list of goods eligible for these reduced levels in Table A, Part II, Part II-bis, and Part III of Presidential Decree No. 633/1972.

How and when do you pay output VAT?

VAT returns

VAT-taxable persons are required to file an annual declaration with the Italian Revenue Agency, reporting all relevant transactions throughout the year. Specifically, those who must submit these returns are:

• Individuals or entities registered for VAT, including those who did not conduct any taxable transactions during the period
  
• Nonresident individuals or entities registered for VAT, whether directly identified or represented by a tax representative
  
• Permanent establishments of nonresidents considered VAT-registered persons
  

This requirement excludes VAT-registered individuals who do not have to file due to regulatory provisions, such as taxpayers who have only recorded exempt transactions during the year and those operating under the flat-rate or minimum regime.

Annual VAT return deadlines

If you are required to file, you must submit your annual VAT return using the appropriate form between February 1 and April 30 following the tax year. Complete the filing using the Italian Revenue Agency’s software and submit it exclusively online through the Fisconline/Entratel services directly or via a qualified intermediary, such as your accountant.

If you submit the VAT return after the deadline but within 90 days, it is still valid but subject to penalties ranging from €250 to €2,000, as outlined in Article 5, paragraph 3 of Legislative Decree No. 471/1997, unless the registrant uses the voluntary correction process.

It is omitted if you submit the filing more than 90 days late. Nevertheless, it might still serve as a basis for recovering any levies you owe.

Keeping up with ever-changing tax regulations can be challenging for your business. To address this need, tools such as Stripe Tax provide automated features that enable you to calculate and collect taxes, generate detailed reports, and simplify filing processes, all through a single integration.

Paying output VAT

To complete the VAT settlement and pay any amount due, you must use form F24, which you can only submit online. The due dates vary depending on whether taxpayers have monthly or quarterly payments:

• For monthly settlements, payment is due by the 16th of each month.
  
• For quarterly settlements, the deadline is the 16th of the second month following the end of the quarter. The due date for quarterly VAT payments are as follows: May 16 for the first quarter, August 16 for the second quarter, November 16 for the third quarter, and March 16 of the following year for the fourth quarter, which coincides with the annual VAT return.