Corporate - Other taxes

Last reviewed - 05 February 2024

Value-added tax (VAT)

Italian VAT (Imposta sul Valore Aggiunto) applies to the supply of goods and services carried out in Italy by entrepreneurs, professionals, or artists and on importations carried out by anyone. Intra-Community acquisitions are also subject to VAT under certain situations.

The Italian standard VAT rate is 22%. Reduced rates are provided for specifically listed supplies of goods and services, such as:

  • 4% for listed food, drinks, and agricultural products, and e-books/e-periodicals that meet certain requirements.
  • 5% for certain health services, for the sale of food herbs, for certain transport services on seas, lakes, and rivers, and for district heating services.
  • 10% for electric power supplies for listed uses, listed drugs, pellets, and for specific products regarding childhood (e.g. milk powder).

Intra-Community supplies and exports are exempt from VAT under certain conditions.

Under certain conditions, transactions with taxable persons who usually carry out export of goods are exempt from VAT with right to deduct. The exemption with right to deduction is subject to the following procedures:

  • The usual exporter is required to submit via electronic means the declaration of intent, which can concern more than one transaction, to the Italian tax authorities, who will issue a receipt with a specific protocol number.
  • The supplier is required to check, on the Italian tax authorities’ website or in its own Tax Box (Cassetto Fiscale), whether the letter of intent has been duly submitted. After checking the above, the protocol number of the receipt has to be quoted on each invoice issued without application of VAT towards the usual exporter. With reference to the applicable penalties in relation to the supplier who does not take care to check whether the letter of intent has been duly submitted, a substantial penalty ranging from 100% to 200% of the VAT amount applies.
  • In case of import, the importer of goods has to quote on the customs declaration the details of the protocol number of the receipt.

The content of the declarations of intent is defined by Act no. 96911/2020 of the Italian tax authorities.

The Italian tax authorities will carry out specific risk analysis and substantial controls with the aim to prevent the release of fake declarations of intent and to invalidate those fake declarations already issued.

In particular:

  • if, as a result of the above-mentioned analyses, the Italian tax authorities find out that one taxable person does not meet the conditions to issue a 'declaration of intent', the latter will be prevented from the possibility of issuing new declarations of intent via electronic means to the Italian tax authorities, and
  • it will no longer be allowed for the supplier to issue an invoice ('exempt from VAT according to article 8, paragraph 1, let. c, Presidential Decree no. 633/1972' as VAT treatment) via the SDI ('Sistema di Interscambio') with the indication of the protocol number of a declaration of intent invalidated by the Italian tax authorities. Starting from 1 February 2024, a specific control will be introduced in SDI that determines the rejection of the electronically issued invoice if the invalidity of the declaration of intent is detected in the 'other management data' field.

In case an irregularity is detected, the Italian tax authorities could also invalidate the declaration of intent sent by the usual exporter.

Specific supplies of goods and services expressly listed in the law are exempt from VAT (e.g. hospital and medical care, education, insurance services, specific financial services, supply/leasing of certain immovable property, cosmetic surgery healthcare services only on condition that the therapeutic purposes are demonstrated by a specific medical certificate).

Input VAT on purchases of goods and services related to business activity generally is allowed for recovery. Special limitations apply in relation to specific items (e.g. cars, entertainment expenses) and to companies carrying out both taxable transactions and transactions exempt from VAT with no right to deduct.

The filing deadline for the annual VAT return is 30 April of the following year.

Cross-border communication

Taxpayers resident or VAT-established in Italy are required to communicate to the Italian tax authorities the data related to the supply of goods and services provided/received to/from counterparts not VAT-established or VAT-registered in Italy, starting from 1 July 2022.

In this respect, Law no. 215/2021, amending paragraph 3-bis of article 1 of Legislative Decree no. 127/2015, provides that the data related to the supplies of goods and provisions of services received/carried out from/in favour of taxable persons not established in Italy (i.e. taxable persons established in the European Union or outside the European Union) must be communicated to the Italian tax authorities in .XML format and transmitted to the SDI (except for the transactions for which an e-invoice or a customs bill is issued and for the purchase of services not exceeding EUR 5,000 that are out of the scope of Italian VAT). In particular, the above-mentioned data will be communicated to the Italian tax authorities within the following deadlines: 

  • The transmission of the data related to the cross-border sales should be carried out within the deadlines of issuance of the invoices or documents that certify the considerations.
  • The transmission of the data related to the cross-border purchases should be carried out within the 15th day of the month following the one in which the foreign supplier invoice is received or the transaction has been carried out. 

Moreover, with reference to the cross-border sales, the Italian resident or VAT-established taxpayers must generate an electronic .XML file to be transmitted to the SDI by using the codes <TipoDocumento> TD01 or TD04 (credit notes) indicating the foreign client as the recipient of the invoice.

On the other hand, with reference to the cross-border purchases, the Italian resident or VAT-established taxpayers must generate an .XML self-invoice/integration document to be transmitted to the SDI by using the following <TipoDocumento> codes:

  • TD17 in relation to integration document/self-invoices for purchase of services from abroad.
  • TD18 in relation to integration document for intra-EU purchases of goods.
  • TD19 in relation to integration document/self-invoice for purchase of goods ex article 17, paragraph 2, Presidential Decree n. 633/1972.
  • TD28 in case of purchases for which the foreign supplier wrongly charged Italian VAT (this provision is applicable from 1 February 2024).

Finally, with reference to the penalties applicable for the cross-border transactions, please note that article 1, paragraph 1104, Law no. 178/2020 provides that, from 1 July 2022, for the omission or incorrect communication of transactions carried out with foreign counterparties, an administrative penalty of EUR 2 per each invoice is applied, up to a limit of EUR 400 per month. The penalty is reduced by half, within the limit of EUR 200 for each month, if the transmission is made within 15 days from the deadline.

Electronic invoicing obligations

Starting from 1 January 2019, a mandatory electronic invoicing obligation is in place for the supplies of goods or services carried out between persons that are resident or established in Italy. This obligation does not apply for non-established taxable persons, even if registered in Italy through direct VAT identification or a fiscal representative.

Electronic invoices should be:

  • converted into .XML format, in accordance with technical specifications referred to format currently used to send electronic invoices towards the public administration
  • signed with a qualified or digital signature (this is mandatory for B2G invoices and recommended for B2B and B2C invoices), and
  • sent to the counterpart through the Italian tax authorities’ SDI.

Electronic invoicing is also mandatory for business-to-consumer (B2C) transactions, where the supplier has the obligation to issue an invoice, with certain different specifications.

For the transmission of electronic invoices, the taxpayers, upon agreements between the parties, can rely on qualified intermediaries. However, the supplier will still be responsible for the issuance of the invoice in front of the Italian tax authorities.

On an experimental basis, in relation to the transactions carried out from 1 July 2021, the Italian tax authorities should have made available the draft of the following documents:

  • Sales VAT ledger.
  • Purchases VAT ledger.
  • Communications of periodical VAT settlements.
  • Draft of the annual VAT return (from 1 January 2022).

At the time being, the Italian tax authorities have limited the above to Italian established taxable persons who carry out VAT payments on a quarterly basis and to:

  • Taxpayers who pay the VAT on a quarterly basis.
  • Taxpayers declared bankrupt in the reference year.
  • Taxpayers who apply specific methods of determining the VAT allowed for deduction, such as agricultural producers or those who carry out related agricultural activities, agrotourism companies or associations operating in agriculture, or wine tourism companies.

E-invoicing regime between Italy and San Marino

A mandatory electronic invoicing obligation has also been introduced for supplies of goods between taxable persons established in Italy and taxable persons established in the Republic of San Marino, which is mandatory starting from 1 July 2022.

The invoicing process towards business customers resident in San Marino provides some peculiarities compared to the SDI process currently in force for domestic supplies. In particular:

  • The electronic invoices and the credit/debit notes related to supplies of goods shipped or transported into the Republic of San Marino, once sent to the SDI, will be transmitted by the latter to the tax office of San Marino, which, after some checks, should validate the invoice by submitting a specific communication to the Italian tax authorities. Accordingly, the outcome of the checks made by the San Marino tax office will be made available by the Italian tax authorities to the Italian supplier through an appropriate IT channel.
  • In this respect, as indicated in article 3 of the Decree, in the event that in the four months following the issuance of the invoice the San Marino tax office does not validate the invoice, the Italian supplier should issue a credit note pursuant to article 26, paragraph 1, Presidential Decree no. 633/1972, without the payment of penalties and interests.
  • On the other hand, if the San Marino office validates the transaction, the latter can be considered VAT-exempt with right to deduction according to articles 8 and 9, Presidential Decree 633/1972.

With reference to the invoices issued by San Marino taxable persons to Italian business customers (with transport of the goods from San Marino to Italy), the e-invoices will be transmitted by the San Marino tax office in electronic format to the SDI, which will make them available to the Italian business customer through a specific IT channel.

The obligation of the electronic memorisation and transmission of the considerations’ data

The electronic transmission of the considerations’ data is a new fulfilment introduced with the purpose to promote the companies’ digitalisation process and, at the same time, to contrast tax evasion and VAT frauds.

Taxpayers that carry out the activities provided by art. 22 of the Presidential Decree no. 633/1972 have the new obligation to memorise and transmit the considerations’ data, on a daily basis, to the Italian tax authorities.

The main benefits for the taxpayers are the exemption from the obligation to keep the considerations’ book, provided by article 24 of the Presidential Decree no. 633/1972, and the abrogation of some accounting fulfilments, such as the issuance and the storage of the fiscal receipts (i.e. 'scontrini' and 'ricevute fiscali').

The transactions are documented by the issuance of a document, the so-called 'documento commerciale'.

Specific exemptions have been temporarily provided to certain taxpayers with regards to the activity performed (e.g. banks, insurance companies, and certain kinds of taxpayers who carry out retail trade activities).

With the 2021 Budget Law, the new penalties regime was introduced related to the penalties that might be applied for the violations related to the electronic memorisation and the telematic transmission of the consideration’s data.

Thresholds to opt for the settlement of VAT on a quarterly basis starting from 1 January 2023

Taxable person can opt for settlement of VAT on a quarterly basis (in this case, 1% interest is due) if the turnover of the previous calendar year has not exceeded a certain threshold, set by the 2023 Budget Law, starting from 1 January 2023, at the following amounts:

  • EUR 500,000 in case of provision of services only.
  • EUR 800,000 in case of supply of goods.

Please note that the previous thresholds, in force until the end of the year 2022, were the following:

  • EUR 400,000 in case of provision of services only.
  • EUR 700,000 in case of supply of goods.

In order to benefit from the above method, an election has to be carried out in the annual VAT return. 

For the above-mentioned taxable persons, the 2021 Budget Law introduced a broader deadline for the registration of the output invoices, i.e. within the end of month following the quarter in which the transaction was carried out and with reference to the month of the tax point.


In order to contend with tax evasion on e-commerce and reduce the VAT gap, a specific compliance obligation has been introduced in Italy starting from year 2019 for taxable persons who facilitate, through the use of an electronic interface such as a virtual market, a platform, a portal, or similar means (i.e. marketplaces), distance sales of imported goods or distance sales of goods within the European Union.

By the end of the month following each quarter, the above taxable persons are required to transmit certain information regarding the supplies carried out by each supplier via the above marketplaces.

The above taxable persons are responsible for VAT due for distance sales supplies carried out via the marketplaces for which they have not transmitted or have incompletely transmitted specific data mentioned by the law, unless they can prove that VAT was paid by the supplier.

Specific regulation regarding the context of the communication as well as the technical ways of filling has been issued.

Such specific compliance obligations remained in force until the end of June 2021 as long as the new e-commerce VAT package rules, as implemented by Legislative Decree No. 83/2021, came into force on 1 July 2021. 

Starting from that date, if a taxable person facilitates, through the use of an electronic interface such as a virtual market, a platform, a portal, or similar means,:

  • distance sales of goods imported from third territories or third countries whose intrinsic value does not exceed EUR 150, and/or
  • distance sales and local sales of goods carried out within the European Union by a taxable person not established in the European Union towards a person who is not a taxable person,

the taxable person who facilitates the supply shall be deemed to have received and supplied those goods oneself.

In this respect, such transactions should be split into two different supplies:

  • A first supply between the supplier and the taxable person who facilitates the supply (non-moved supply).
  • A second supply between the taxable person who facilitates the supply and the final customer (moved supply).

In order to declare and pay VAT on their supplies, the taxable persons who facilitate the supply are allowed to opt for OSS/IOSS special regimes (please see below).

As part of the actions to contend VAT evasion and fraud, the 2023 Budget Law has introduced new reporting requirements, implying the communication of data of suppliers and of transactions carried out, to be borne by the electronic interface (i.e. marketplaces, digital platforms, digital portals, and similar) that facilitates the online sales to end consumers of certain goods (e.g. mobile phones, gaming consoles, tablet PCs, and laptops) to be identified by decree of the Minister of Economy and Finance, which are present in the territory of the state.

The 2023 Budget Law does not indicate a specific date of effectiveness for this new reporting obligation. Also in this respect, it would be necessary to wait for the issuance of the implementing regulations of the Minister of Economy and Finance within 60 days from the entry into force of the 2023 Budget Law (i.e. 29 December 2022).

One-stop shop (OSS) / Import one-stop shop (IOSS) regimes

By implementing the new e-commerce VAT package rules, Legislative Decree No. 83/2021 also transposes in Italy the new OSS and IOSS special regimes.

OSS and IOSS are the new optional European VAT clearance system, centralised and digital, that extends the scope of the mini one-stop shop (MOSS), currently covering electronic, telecommunications, and broadcasting services only.

The MOSS is an electronic system that allows taxpayers who provide TTE services in the European Union to declare and pay the VAT due in all the EU member states in a single member state.

As of 1 July 2021, the MOSS has therefore become an OSS and has been extended to all the following B2C transactions:

  • Distance sales of goods imported from third territories or countries (with the exception of goods subject to excise duty) carried out by suppliers and taxable persons facilitating the supply through the use of an electronic interface (to be reported in the IOSS section).
  • Intra-Community distance sales of goods carried out by suppliers and taxable persons facilitating the supply through an electronic interface (to be reported in the OSS section).
  • Domestic sales of goods carried out by taxable persons facilitating the supply through an electronic interface (to be reported in the OSS section).
  • Supplies of services carried out by taxable persons not established in the European Union or by taxable persons established within the European Union but not in the member state of consumption (to be reported in the OSS section).

The OSS scheme simplifies the VAT compliance obligations applicable for taxable persons that sell goods and provide services to final consumers in the European Union, enabling them to:

  • register electronically for VAT purposes in a single member state for all the eligible supplies of goods and provisions of services carried out towards final consumers in the other 26 member states
  • declare VAT by means of a single electronic VAT declaration and make a single payment of the VAT due on all the eligible supplies of goods and services carried out, and
  • collaborate with the tax authorities of the member state in which they are registered for the OSS and in a single language, even if their supplies take place in other EU countries.

In this respect, it is worth reminding that the new legislative provisions abolish the reference thresholds previously in force for the payment of VAT in the country of residence in the context of intra-Community distance sales. With the new regulations, a single threshold of EUR 10,000 is recognised; once this is exceeded, the VAT is applied in the country where the service or sale is to be made.

Moreover, the new provisions also abolish the VAT exemption for goods of negligible value imported into the European Union. Since 1 July, therefore, VAT is due on all the imported goods regardless of their value.

The creation of the IOSS regime allows suppliers who sell goods delivered or transported from a third country or territory to final customers in the European Union to collect VAT from the purchaser on distance sales of low-value imported goods and to declare and pay this tax through the IOSS.

If IOSS is used, the import of low-value goods (with an intrinsic value not exceeding EUR 150) into the European Union is exempt from VAT.

Please note that, since 1 April 2021, on the Italian tax authorities’ website it is possible to register in order to exercise the option for the application of OSS and IOSS special regimes.

The use of the special regimes is optional; however, if a taxpayer exercises the option, it should apply them for all the operations that fall within them.

Timeline in order to deduct input VAT

A reduction of the time frame for the exercise of the right to deduct VAT has been introduced since 2017.

The right to deduct input VAT may be exercised at the latest with the VAT return related to the year in which the right arises and under the conditions existing at the time of such a right has arisen.

According to the Italian tax authorities' guidelines, inter alia, the time from which the deadline for VAT deduction begins to run is set when the following conditions jointly happen:

  • the tax point occurred (substantive requirement), and
  • a valid invoice is received by the taxpayer (formal requirement).

In practice, a taxpayer that purchased and paid for a service in December 2017 and receives the invoice (dated December 2017) in January 2018 can exercise the right of deduction only from the VAT settlement related to January 2018 and by 30 April 2019 (i.e. deadline for submission of the relevant VAT return). However, VAT deduction must be exercised under the conditions existing at the time of the tax point (i.e. 2017).

Conversely, in case the invoice is received in December 2017, it will be possible to register it by 30 April 2018, but it will be necessary to use a special sectional of the VAT purchase ledger related to 2017; as such, the purchase will be included in the annual VAT return of the same calendar year.

Previously, the right to deduct could be exercised, at the latest, with the VAT return related to the second year following the one in which the right to deduct had arisen.

The Italian tax authorities also clarified that the credit notes as per article 26, paragraph 2, Presidential Decree no. 633/1972 (e.g. following to customer’s insolvency proceedings) have to be issued, and the higher VAT previously paid at the time can be deducted, at the most late, within the deadline for the submission of the annual VAT return re the year in which the right to issue the credit note has arisen. In this respect in the case the right to issue the credit note has arisen during the year X and the related credit note has been issued in the following year (i.e. year X+1) within the deadline for the submission of the annual VAT return of the year X, the above-mentioned credit note has to be included in the VAT settlement of the month of issuance or, at the latest, in the annual VAT return of the same year (i.e. X+1).

Starting from 23 October 2018, the right to deduct input VAT can be anticipated at the deadline of the VAT settlement in relation to the purchase invoices received and registered within the 15th of the month following the one in which the transaction is carried out.

By way of example, input VAT deduction on a purchase invoice whose tax point occurs on 31 January 2019 can be exercised with the January VAT settlement provided that the invoice is received and registered by 15 February 2019.

This possibility is not provided (as already introduced from 2017) for invoices received related to transactions carried out in the previous year. In this case, VAT must be deducted in the year in which the invoice is received.

Issuance of credits notes in the case of insolvency proceedings

The right to recover VAT beyond the annual year limit is also applicable in the event of non-payment of the consideration, in whole or in part, by the customer, starting from the date on which the latter has been subjected to an insolvency procedure.

The debtor is considered subjected to insolvency proceedings from the date of the decision declaring the bankruptcy (or the act of compulsory administrative liquidation or the decree of admission to the procedure of arrangement with creditors or the decree that provides for the extraordinary administration procedure of large companies in crisis).

If the consideration is paid in whole or in part, the repayment of the recovered VAT regarding the credit note is due by the supplier.

According to the Italian tax authorities:

  • With reference to the issue of the creditor’s prior introduction to the debtor’s liabilities as a prerequisite for the recovery of the VAT, the issuance of the credit note (from the date the insolvency procedure starts) is not precluded to the creditor who decided to not join to the procedure. Therefore, the previous tax authority’s practice that subordinated the issuance of the credit note to the 'necessary participation of the creditor to the procedure' has been replaced.
  • With reference to the deadline within which the creditor can issue the credit note and exercise, consequently, the right of VAT recovery, the Italian tax authorities provide with the following example, confirming the content of the above-mentioned Ruling no. 119/2021:
    • In the case of sentence declaring the bankruptcy of the debtor in the course of 2022, the creditor will have the right to issue the credit note in the same year and recover VAT, at the latest, with the annual VAT return to be submitted within 30 April 2023 (relating to the 2022);
    • however, it is also possible for the creditor to issue the credit note within the first four months of 2023 (deadline for submission of VAT return relating 2022) and, in such a case, exercise the right to the VAT recovery in the periodical settlement of issuance of the credit note or in the annual VAT return to be submitted within 30 April 2024 (relating to 2023).

The new provisions apply in relation to insolvency proceedings starting from 26 May 2021.

In this respect, the Italian tax authorities, with the Response no. 485/2022, have clarified that, in the case the creditor has decided not to issue the credit note at the beginning of the insolvency procedure but decided to join the insolvency procedure and wait for the declaration of failure of the latter, the taxable person is entitled to issue the credit note with the definitiveness of the unfruitful distribution plan that certifies the definitive non-payment by the customer.

As provided by the Italian Law, the possibility of issuance of credit note at the beginning of the procedure applies also to the procedures regarding the negotiated settlement of the crisis (i.e. ’composizione negoziata della crisi‘) referred to in article 23, paragraph 1, letters a) and c) and paragraph 2, letter b), Legislative Decree 14/2019 Code of business crisis and insolvency (i.e. ’Codice della crisi d'impresa e dell'insolvenza’).

In this case, creditors who, following the above-mentioned negotiation, have reached an agreement with the debtor with consequent reduction of their credits can proceed with the reducing of the original credit. In particular, the credit note can be issued, starting from the date of the publication in the Register of Companies of the above-mentioned agreement or the application for approval of a debt restructuring agreement, in the event of an unsuccessful outcome of the negotiations.

European VAT group

From 1 January 2019, the European VAT group rules are applicable, provided the option for was elected by 15 November 2018 (for following years, the deadline is September 30 for VAT groups effective from the following year; in the case the option is elected from 1 October to 31 December, the VAT group is effective from the second following year).

In the main, in the case of election of the VAT group:

  • transactions between taxable persons participating in the VAT group are considered as not relevant for VAT purposes (apart from certain cases), and
  • the VAT group operates as a single VATable person towards those not participating in the group itself.

There are certain conditions to be met in order to be entitled for the election.

Starting from 23 October 2018, European VAT group rules also apply to VATable persons established in Italy who participate in a Cooperative Banking Group (Gruppo Bancario Cooperativo). In this case, the group has effect from 1 January 2019 if the option was elected by 31 December 2018 or from 1 July 2019 if the option is elected by 30 April 2019.

The current VAT group settlement regime, which consists of settlement of VAT debits and credits among taxable persons meeting certain requirements in terms of chain of controls, will remain in place.

Via a legislative provision published in 2020, under specific conditions, VAT exemption has been confirmed applicable also for the past and to services rendered by consortia, consortium companies, and cooperative companies with consortium functions (hereinafter 'consortium') towards a consortium member who is also a member of a VAT group, where the consortium is not part of it.

The above-mentioned law also provides for a specific way of calculation of one of the conditions (pro rata of deduction) for the VAT exemption in the case of a VAT group.

Italian tax authorities’ guidelines in case of a UK VAT group

As a general rule, where either a branch and/or the head office/’sister‘ branch is a member of a EU VAT group, supplies of services from a VAT point of view are relevant for VAT purposes (since the mentioned ’entities‘ are considered as separate taxable persons).

In the light of the evolution of the guidelines of the VAT Committee of the European Commission, the Italian tax authorities clarified that:

  1. A VAT group set up in the United Kingdom, after the so called ’Brexit‘, is not the same as a VAT group set up in a member state for the purposes of the application of the VAT Law and, in particular, of the principle expressed in Skandia judgement (C-7/13).
  2. In the light of the above, the supplies of services or goods carried out between the two branches of the same legal entity, e.g. branch established in Italy and branch established in the United Kingdom, the latter being a member of a VAT group established in the United Kingdom, are excluded from the scope of application of VAT (i.e. Skandia principles are not applicable) since the VAT group set up in a third country (United Kingdom) is not comparable to a VAT group set up in a member state of the European Union.

Reporting obligations

In addition to the new monthly communication of the data regarding the purchases and sales transactions carried out with foreign counterparts to the SDI, taxable persons have to submit to the Italian tax authorities, on a quarterly basis, the communications of the periodic VAT balances.

The communications of periodic VAT balances require one to submit electronically to the Italian tax authorities, on a quarterly basis, the summary of VAT balances accounting data (also in case the entity results in a credit position). The deadlines for each quarter are 31 May, 30 September, 30 November, and the last day of February of the following year (in case the deadline is Saturday/Sunday/bank holiday, it is postponed to the first working day that follows).

The communication of periodic VAT balances of the fourth quarter where the relevant data are, alternatively, included in the annual VAT return. In this case, the annual VAT return must be submitted by the end of February of the following year (e.g. the communication of the fourth quarter of 2019 can be avoided provided the relevant data are included in the 2019 VAT return to be submitted by the end of February 2020; the standard deadline of the annual VAT return would be April 2020).

Service supply rules

Generic services supplied by a taxable person to another taxable person (business-to-business or B2B) are in the scope of the Italian VAT if the services are supplied to Italian taxable persons or to PEs of an Italian non-resident entity.

The specific rules are as follows:

  • For services related to immovable property, reference must be made to the place in which the immovable property is located.
  • For the transportation of passengers, the place in which the transportation takes place must be identified, including the proportion of the distance covered.
  • For catering and restaurant services, the place in which the activity will be physically carried out must be identified.
  • For short-term hiring, leasing, and similar means of obtaining transport services, the place in which the vehicle is used must be identified (use and enjoyment rule has been implemented on these services).

The general rule for services supplied by a taxable person to a non-taxable person (B2C) identifies the place of taxation with the country of residence of the supplier.

Several rules, in addition to the B2B general rules, exist for the following:

  • Brokerage services.
  • Goods transport services.
  • Services related to movable goods and ancillary activities related to transports.
  • Long-term hiring/leasing of means of transport services.
  • Electronic services supplied by extra-European Union suppliers.
  • Telecommunications and television/radio broadcast services.

In addition, special rules are provided for certain services rendered to final customers established outside the European Union.

In relation to the VAT treatment of cultural, artistic, sporting, scientific, educational, recreational, and similar services, VAT is due in the country where the activities were physically carried out for B2C activities and VAT is due in the country of the recipient for B2B activities other than admission. For B2B services in respect of admission, the place of supply is where the events take place.

Time of supply for certain services

Time of supply is the time of completion in case of:

  • supply of services falling under the general rule (i.e. generic supply of services) rendered by EU and non-EU taxable persons to taxable persons established in Italy, and
  • supply of services falling under the general rule rendered by taxable persons established in Italy to EU and non-EU taxable persons.

In case of periodic or continuous supply of services, the time of supply is the date of maturity of the consideration.

Moreover, the above supplies of services, if performed/received by taxable persons established in Italy continuously over a period longer than one year and if no payments are carried out, even partially, in the same period, shall be considered carried out at the end of each calendar year up to completion of the same supplies.

Reverse-charge mechanism

According to the reverse-charge mechanism, the obligations related to supply of goods and provision of services carried out in Italy by non-resident taxable persons towards taxable persons established in Italy are fulfilled by the latter. The recipient of goods and/or services has to integrate the invoice received by the EU supplier or has to issue a self-invoice in case of a non-EU supplier and record it in the VAT sales register and VAT purchase register within a defined timeline.

Reverse-charge mechanism also applies to certain domestic supplies between Italian taxable persons (e.g. cleaning, demolition, equipment installation, and completion services related to the buildings). Please note that for certain supply of goods (e.g. supplies of gas and electricity to taxable dealer; supplies of gas and electricity certificates; supplies of mobile telephones), the reverse-charge mechanism is applicable on a temporary basis and on the optional decision of Italy as a EU member state, according to article 199-bis, paragraph 1, EU Directive no. 112/2006 (i.e. so-called 'VAT Directive'). In this respect, please note that the EU Directive no. 2022/890 has just postponed the deadline for the EU member states to adopt the above-mentioned 'optional reverse-charge mechanism' from 30 June 2022 to 31 December 2026. In this respect, Italy has just transposed the aforementioned law provision (art. 22, Law Decree no. 73 dated 21 June 2022). 

The application of the reverse-charge mechanism also applies to the provision of services (with certain exceptions) carried out through procurement contracts, subcontracting contracts, contracts of reliance to consortium members, or other contractual relationships however named, which are carried out with the prevalent use of manpower at the client's premises and with the use of capital goods owned by the client or attributable to the latter in any form (the effectiveness of the above-mentioned law provision is subject to the issuance, by the Council of the European Union, of a specific authorisation).

According to the 2023 Budget Law, the omitted reverse charge is punished with the penalty for undue input VAT deduction (i.e. 90% of input VAT that could have been deducted) in the case the violation is committed in the case of non-existent supplies within a fraud or evasion and where it is proved that the purchaser/recipient was aware of it.

Split-payment mechanism

The split payment is the mechanism provided for by article 17-ter Presidential Decree no. 633/1972 applicable for supplies of goods or services relevant for VAT purposes carried out towards, mainly, the Public Administrations (please note that the Italian VAT Law and specific Ministerial Decrees duly established the list of taxable persons subjected to the above-mentioned mechanism). 

According to the above-mentioned mechanism, the Public Administration pays to its supplier the amount net of VAT for the purchase of goods and services, while the relative VAT, quoted in the invoice issued by the supplier, is paid directly to the Treasury by the Public Administration itself.

Italy is authorised by EU Council to continue to apply the split payment mechanism until 30 June 2026 but, starting from 1 July 2025, the split payment regime will not be applied to the transactions carried out towards companies listed on the stock exchange that are included in the Financial Times Stock Exchange Milano Indice di Borsa (‘FTSE MIB’) index (and quoted yearly in the Italian Official Gazette). Therefore, for the period 1 July 2025 to 30 June 2026, split payment mechanism will apply to the transactions carried out towards public administrations and companies controlled by public administration according to article 2359 of the Civil Code.

VAT credit offset with other taxes

To offset a VAT credit against other taxes for an amount higher than EUR 5,000, it is necessary to wait until the 16th day of the month following the filing of the yearly VAT return on which the credit is shown.

According to the 2022 Budget Law, the threshold to offset tax credits (including VAT) with other taxes or social contributions, via the F24 form, or through simplified tax refund procedure, has been increased up to EUR 2 million.

Furthermore, in order to avoid abuse, taxpayers intending to offset a VAT credit for an amount higher than EUR 5,000 are required to ask their tax advisors or auditors to affix their signature to the VAT return, which is known as the ‘conformity mark’ (i.e. visto di conformità).

The 2024 Budget Law introduced further restrictions for the offsetting of the credits with other tax debits. In particular, the offset is prevented for taxable persons who have to pay taxes due for committed violations (so-called 'iscrizione a ruolo') or executive tax assessment entrusted to the Revenue Agency for amounts in total exceeding EUR 100,000 (for which the payment terms expired and payments are still due or the payment is not suspended).

Provisions to prevent the opening of fictitious Italian VAT numbers

The 2023 Budget Law provides for some measures to prevent the opening of fictitious Italian VAT numbers. More in detail, the Italian tax authorities have the task of carrying out specific analysis of the risk related to the issue of new Italian VAT numbers, at the end of which it may invite the taxable person to appear in person to produce the compulsory accounting records required by the Italian VAT Law to verify the actual activity carried out and to demonstrate the absence of the identified risk profiles. Should the taxable person fail to appear or should the outcome of the checks on the documents produced be negative, the Italian tax authorities may decide to terminate the Italian VAT number.

The application for an Italian VAT number may subsequently be submitted by the same person, as an individual entrepreneur, self-employed person, or legal representative of a company, association or entity, with or without legal personality, set up after the termination of the VAT number. However, this requires the prior issuance of a surety policy or bank guarantee for an amount of no less than EUR 50,000 with a duration of three years from the date of issue.

The 2023 Budget Law has introduced the provision of an administrative penalty of EUR 3,000 to be applied at the same time as the above-mentioned termination of the VAT registration, without the possibility of applying penalty reduction (so-called 'cumulo giuridico’).

Checks on VAT registration numbers

There are certain checks that the Italian tax authorities have to carry out in relation to the attribution of a VAT number to taxable persons, such as:

  • newly assigned VAT numbers, characterised by a short period of operation and link to a failure to fulfil the reporting and tax payment obligations, and
  • existing VAT numbers, specifically those that 'after a period of inactivity or following changes in the object or in the structure, restart to operate with the aforementioned characteristics'.

In particular, the Italian tax authorities will carry out specific risk analyses on VATable persons, following which, the taxpayer may be invited to appear at the offices to show their accounting records. If the taxpayer does not comply with the above-mentioned request or does not provide the elements suitable for demonstrating the non-existence of the risk profiles, the Italian tax authorities’ office in charge notifies the provision of termination of the VAT number together with the penalties.

The recipient of the provision can subsequently request the attribution of a new VAT number, only upon presentation of a bank guarantee in favour of the Italian tax authorities for a period of three years and for an amount, in any case, not less than EUR 50,000.

Sale and lease back: New clarification on VAT treatment by the Italian authorities

With Resolution no. 3 of 3 February 2023, the Italian tax authorities have provided guidelines on the VAT treatment to apply on the sale and lease back agreement, that is a sale agreement with a lease back.

In brief, the Italian tax authorities have stated that some elements of the contractual arrangements may constitute significant indices in order to evaluate the transaction for VAT purposes as a supply of goods or rather as a purely financial operation.

In particular, for example, the following are indicative of an exclusively financial nature of the transaction:

  • The presence, within the regulation of the contractual relationship, of clauses that exclude or significantly limit the leasing company’s power to legally dispose of the asset as owner (e.g. clauses that expressly limit the owner’s prerogatives, precluding the possibility of selling the asset or granting it as a guarantee to third parties).
  • The provision of faculties, contractually granted to the user of the asset, which are particularly incisive and stringent, such that it is the latter who retains the right to dispose of the asset 'as if [one] were the owner' (e.g. conventional clauses limiting the liability of the formal owner that, in effect, highlight that the user continues to bear most of the risks and benefits related to the legal ownership of the asset).

The qualification of the sale and lease back must, therefore, be left to the interpreter according to a case-by-case approach.

Italian tax authorities Circular no. 30 of 27 October 2023: first considerations on the VAT treatment of crypto-assets

The Italian tax authorities have provided some comments on the VAT treatment of crypto-assets, although not regulated by the aforementioned Finance Law.

As a preliminary remark, the Italian tax authorities have recalled the fact that there is a lack of a specific VAT legislation at the domestic and EU level and the necessity, for the time being, to refer to international best practice and guidelines at the European level.

In addition, the Italian tax authorities emphasise how, for the topic under analysis, it is necessary to adopt a look-through approach also for the determination of the VAT treatment of crypto-assets, as well as recommend a case-by-case analysis: this is due to the fact that this is a constantly evolving topic “linked to the use of technologies that are themselves constantly advancing and whose potential developments cannot be imagined at present”. The Italian tax authorities also suggest that it is not the nomen juris attributed to the instrument by the issuer what matters but an analysis of its substance is required.

Notwithstanding the foregoing, without claiming to be exhaustive, the Italian tax authorities have anyway provided more comprehensive guidelines compared to previous clarifications. A case-by-case analysis remains necessary whenever the actual cases and the characteristics of each case do not correspond to the categories of instruments already known and for which an assessment has already been made by the Italian tax authorities.

Solidarity contribution on the energy sector

The 2023 Budget Law introduced a temporary solidarity contribution for the year 2023 due by the enterprises with activities in the energy and oil and gas sector due to the extraordinary increase in prices in this sector. Specific provisions are introduced to determine the taxable basis of the solidarity contributions.

Registration tax

Specific deeds and contracts must be filed with the local registration tax office either upon signature or if specific circumstances occur, and the relevant tax must be paid.

Depending on the nature of the contract and on the assets that are the object of the contract, as well as on the form of the contract, registration tax is levied as a fixed amount or as a percentage of the value of the goods and/or rights that are the object of the contract. As a general rule, no proportional registration tax is due in the case of transactions subject to VAT.

VAT and registration tax on lease of immovable properties

Leases of residential and commercial buildings, or portions thereof, generally are exempt from VAT with no right to deduction and subject to the registration tax at a 2% or 1% rate.

Different VAT rates, VAT treatment, and registration tax treatment apply depending on the type of buildings the lease refers to (e.g. residential, commercial buildings) and the supplier (e.g. individual, constructions companies, taxable persons other than construction companies).

Specific rules apply in case of financial leases of residential and commercial buildings from a registration tax perspective.

Customs duties

At the moment of the importation of goods into the EU territory, customs duties are applied. The amount of customs duties to pay depends on the value and nature of the goods imported. In particular, for each kind of good, the Common Customs Tariff provides a tax rate to be applied to the value or number of the goods imported.

The correct classification of the goods is one of the most important issues to consider when an economic operator introduces goods in Italy. A wrong classification can give rise to the application of higher customs duties, and the operator could face a tax burden not due, or to the application of lower customs duties, and this situation could lead to a tax assessment by the Italian Customs Authority.

The value of the goods is represented by the transaction value, hence, the price actually paid or payable for the goods when sold for exportation to the customs territory of the EU, provided that:

  • there are no restrictions as to the disposal or use of the goods by the buyer
  • the sale or price is not subject to some condition or consideration for which a value cannot be determined with respect to the goods being valued
  • part of the profits of any subsequent resale, disposal, or use of the goods by the buyer will not be accrued, directly or indirectly, to the seller, and
  • the buyer and seller are not related, or, where the buyer and seller are related, that the transaction value is acceptable for customs purposes.

In determining whether the transaction value is acceptable, the fact that the buyer and the seller are related is not, in itself, sufficient for considering the transaction value as not acceptable. Where necessary, the circumstances surrounding the sale are examined, and the transaction value is accepted if the relationship did not influence the price.

The price actually paid or payable is the total transaction amount paid for the imported goods and includes all payments made as a condition of sale of the imported goods by the buyer to the seller or by the buyer to a third party to satisfy an obligation of the seller.

In determining the customs value, the following items shall be added to the price, to the extent that they are incurred by the buyer and are not included in the price (list not exhaustive):

  • Commissions and brokerage.
  • Royalties and licence fees related to the goods under assessment.
  • The cost of transport and insurance of the imported goods.

At the same time, provided that they are shown separately from the price actually paid or payable, the following items shall not be included in the customs value (list not exhaustive):

  • Charges for the transport of goods after their arrival at the place of introduction into the customs territory of the European Union.
  • Charges for construction, erection, assembly, maintenance, or technical assistance, undertaken after importation of imported goods such as industrial plant, machinery, or equipment.
  • Buying commissions.

A reduced or zero rate of duty at importation can be applied when the goods imported have a preferential origin. The preferential origin depends on the existence of commercial agreements between the European Union and other non-EU states or by facilities provided by the European Union to non-EU states unilaterally.

The application of a reduced or zero rate of duty can even depend on the existence of preferential tariff treatment or on the existence of a particular exemption provided by law for some kind of goods.

Any person may appoint a representative in one's dealings with the Customs Authority to perform the activities and formalities laid down by customs rules. Such representation may be direct, in which case the representative shall act in the name and on behalf of another person, or indirect, in which case the representatives shall act in one's own name but on behalf of another person.

For direct representation, a forwarding agent, holder of a particular licence, must be appointed.

The representative must be established within the European Union.

Excise duties

The following goods are subject to excise duties:

  • Energetic products (e.g. petrol, gas oil, natural gas, coal).
  • Alcohol and alcoholic drinks (e.g. wine, beer, ethylic alcohol).
  • Processed tobaccos (e.g. cigars, cigarettes, tobacco).
  • Electric power.

The subjection of a product to excise duties has to be verified on the basis of its customs combined nomenclature code.

The tax liability, depending on the products, arises:

  • at the moment of importation or production (and the excise duties must be paid at the moment in which they are released for consumption in Italy)
  • when the excisable goods are used for heating or as fuel, and
  • when the excisable goods are released for consumption or used for own use.

As a general rule (with exception of natural gas and coal, coke, and lignite), with reference to excise goods released for consumption during a month, the payment of the relative excise duties has to be made by the 16th day of the following month.

With reference to excise goods imported, customs rules are applied as far as the procedure and terms of payment are concerned.

The production, processing, and holding of 'excise goods', except from natural gas, coal, coke, lignite, and electric power, are subject to a suspensive regime performed through a fiscal warehouse.

In order to manage a fiscal warehouse, it is necessary to acquire a licence issued by the Italian Customs Authority, and there are specific obligations for the owner of a fiscal warehouse (e.g. provide for a particular guarantee, keep a particular accounting system for the goods stored, be subject to controls performed by Italian Customs Authority, where requested).

The Italian legislation provides for many exemptions with regards to the use of 'excise goods'.

Furthermore, under certain circumstances, a tax refund is granted to the operator who released for consumption if, afterwards, the products are not consumed in Italy.

Plastic tax and sugar tax

The 2020 Budget Law introduced a new tax on the utilisation, event partial, of single-use plastic items or ’MACSI‘ (‘plastic tax‘), which have or are intended to have the function of containing, protecting, handling, or delivering goods or food products (e.g. plastic bottles, bags, and trays for food), even in sheet, film, or strip shape.

The tax does not apply to compostable MACSIs, as well as to medical devices and plastic containers used to contain and protect medicinal drugs.

The taxable amount of the new tax is fixed at EUR 0.45 per kilogram of plastic material contained in the MACSI.

The 2020 Budget Law also introduced a new tax on sweetened beverages (‘sugar tax’). Notably, the tax applies to finished products and those prepared to be used as such after dilution, falling within the headings of NC 2009 (fruit juices, vegetables, and legumes) and 2202 (water with added sugar or other sweeteners or flavouring, and other non-alcoholic beverages) of the EU combined nomenclature, put up for sale, intended for human food consumption, obtained by adding sweeteners, and having an alcoholic strength of less than or equal to 1.2% by volume.

The taxable amount of the new tax is fixed, respectively, at EUR 10 per hectolitre for finished products and at EUR 0.25 per kilogram for products intended to be used as such after dilution.

An exemption applies to sweetened beverages if the overall content of sweeteners is less than or equal to, respectively, 25 grams per litre for finished products, or 125 grams per kilogram for products intended to be used as such after dilution.

The 2024 Budget Law provided for the deferral of both the plastic tax and sugar tax to 1 July 2024.

Carbon Border Adjustment Mechanism (CBAM)

Regulation EU 2023/956 of the European Parliament and of the Council of 10 May 2023 introduced the so-called ’Carbon Border Adjustment Mechanism’ (CBAM).

Starting 1 October 2023, the CBAM applies to import of the following product groups to the European Union from non-EU countries:

  • Aluminium
  • Iron and steel
  • Fertilisers
  • Hydrogen
  • Electricity
  • Cement

 The CBAM does not apply to goods originating in the following countries:

  • Iceland
  • Liechtenstein
  • Norway
  • Switzerland

In the transitional period starting 1 October 2023, there are requirements for quarterly reporting of embedded greenhouse gas emissions of products imported to the European Union, with the first reporting to be submitted by 31 January 2024.

In the CBAM definitive period starting 1 January 2026, only the ’authorised CBAM declarants‘ would be allowed to import the CBAM products to the European Union.

In the definitive period, there would be more obligations in relation to CBAM, including purchasing certificates, verification of greenhouse gas emissions data, and submission of annual declaration.

The price of CBAM certificates would be linked to the carbon prices at the EU ETS.

Stamp duty taxes

Stamp duty taxes (Imposta di Bollo) apply on a certain list of deeds or documents provided for by the relevant law provision (e.g. checks, bills of exchange, statements of account, certificates, books of account, deeds of transfer of quotas, and, in some specific cases identified by the Law, invoices).

According to the kind of deed, stamp duty tax is due upon the deeds’ origin or in case of use (e.g. if the deed is filed to the Italian Registration Office). Moreover, it can be a fixed amount or as an amount proportional to the value of the deed or document.

Stamp duty tax can be paid:

  • ordinarily, through a physical stamp attached on the document, or
  • virtually, through electronic means (in this case, a specific authorisation from the Italian tax authorities and a specific process procedure are needed).

Even considered the mandatory electronic invoicing obligation for the supplies of goods or services carried out between persons that are resident or established in Italy, there are specific ways of payments of stamp duty tax.

Stamp duty tax is usually alternative to VAT; however, in case of considerations partially subject to VAT and partially not subject to VAT, the invoice is subject to stamp duty tax if the total amount of the considerations not subject to VAT exceeds EUR 77.47. Moreover, some transactions are stamp duty tax exempted (e.g. inter-Community supply of goods). For transactions that are exempted from VAT (with restriction on VAT credit) and for transactions out of scope of VAT, exceeding EUR 77.47, an amount of EUR 2 is due as stamp duty tax for each issued invoice.

For electronic invoices sent to SDI, the stamp duty must be paid quarterly on the basis of the calculations provided by the Italian tax authorities.

The Italian tax authorities will make available, within the reserved area Fatture e Corrispettivi of the Tax Box (Cassetto Fiscale), a payment service and an F24 draft with the indication of the stamp duty to be paid (determined on the basis of the amount indicated in the field 'DatiBollo' of the .XML invoice).

The 2021 Budget Law provides that for the payment of stamp duty tax on e-invoices and other documents submitted through the SDI, the taxpayer who provides the goods or services is jointly and severally liable, even where the invoice is issued by a third party.

The Italian tax authorities, through Act no. 34958/2021, introduced important changes related to the settlement of stamp duty on e-invoices. In particular, the new provisions concern: 

  • the procedures, addressed to the Italian Tax Authorities, to detect e-invoices subject to stamp duty tax, and 
  • the procedures, addressed to the taxpayer, for the consultation and integration of the data relating to the stamp duty tax and for its payment.

Unified municipal tax (Imposta Unica Comunale or IUC)

The IUC is composed of the following different taxes:

  • Imposta Municipale Unica (IMU): Real estate tax levied on the ownership of immovable properties (buildings, rural land, farmlands), except for immovable properties owned as primary private properties. The standard tax rate is 0.76%. Depending on the municipality and status of the taxpayer, the tax rate can be increased or decreased. The taxable base is generally determined on the basis of the so called ‘cadastral value’ (i.e. capitalisation of the deemed standard income that is expected to be derived from the real estate).
  • Tributo per i Servizi Indivisibili (TASI): A service tax due by real estate owners and by tenants, except for immovable properties aimed as private properties (different from immovable properties falling under the cadastral category A/1, A/8, and A/9). The amount due by the tenant can range according to the Regulation stated by the municipality.
  • Tassa sui rifiuti (TARI): A waste tax levied on the owner or the user of immovable properties.

The 2020 Budget Law reviewed the law provision regarding the taxes levied on the ownership of immovable properties. In particular, it has been provided that, starting from the year 2020, the tax on indivisible services (i.e. the above-mentioned 'Tributo per i Servizi Indivisibili [TASI]') is abolished and there is only one form of real estate levy, the discipline of which, fundamentally, follows the existing one for the previous 'Imposta Municipale Unica (IMU)'. In particular, generally speaking, the following has been provided for the new 'Imposta Municipale Unica (IMU)':

  • The tax rate is set at 0.86%, with the possibility for municipalities to increase it to 1.06% or decrease it until zero.
  • The deadline for the submission of the tax return is 30 June of the year following the one in which the ownership of the immovable property has begun or in which there have been significant changes in the determination of the tax.

Financial Transaction Tax (FTT)

Italian FTT applies to (i) cash equities, (ii) derivatives, and (iii) high-frequency trading transactions.

Cash equities FTT applies to the purchase of shares and other equity instruments issued by Italian companies, as well as securities (wherever issued) tracking those Italian shares (e.g. ADRs). The taxable base is the net daily balance of transactions on the same financial instruments by the same person on the same settlement date. The rate is 0.2% on OTC trades or 0.1% on trades executed in a regulated market (or multilateral trading facility).

Derivatives FTT applies to any derivative contract or securitised derivative, whose underlying value is directly or indirectly tied to Italian shares. The taxable base is the notional amount of the derivative (no netting applies), and it is subject to a special tax scale, on both the purchase and the sale legs; the amount is reduced to 1/5 for transactions executed on regulated markets and multilateral trading facilities.

High-frequency trading FTT applies to transactions on shares (wherever issued) and share-based derivatives (wherever the underlying share is issued) in the Italian financial markets; trades amended or cancelled within half a second are subject to a 0.02% rate, to the extent they exceed 60% of overall trades.

Digital service tax (DST)

As of FY 2020, corporations will apply a tax at the rate of 3% on the value of specific digital services collected, net of VAT and other indirect taxes.

The web tax is addressed to taxpayers who individually or at the group level realise during a taxable year (i.e. calendar year):

  • a total amount of worldwide revenues exceeding EUR 750 million, and
  • a total amount of revenues realised in the Italian territory exceeding EUR 5.5 million.

Taxpayers must pay the tax by 16 May of the calendar year following the year in which the taxable revenues were obtained.

Taxpayers also must submit an annual tax declaration regarding the provided taxable services by 30 June of the following year. For companies that are part of the same group, a single entity must be identified to comply with the above-described provisions.

The entry in force is 1 January 2020. The Italian DST shall be repealed when internationally agreed-upon provisions on the digital economy’s taxation become applicable.

The DST is aimed at the revenues collected from the provision of the following services:

  • Channeling of advertisement on a digital interface targeted to the users of that digital interface.
  • Offer of a multi-sided digital interface that allows users interaction and for the purposes of facilitating the direct provision of goods and services.
  • The transmission of data collected about users and generated from users' activities on digital interfaces.

The collected revenues are taxable when the user uses the device to access the above digital services in the Italian territory. In order to identify the location of the user, the Italian tax authority has provided specific linking rules between the user and the Italian territory (i.e. IP address or by other means of geo-localisation).

Social security contributions

The Italian employer, in order to pay social security contributions for employees, must register with the Italian Social Security Administration (Instituto Nazionale Previdenza Sociale or INPS).

The total social security rate is around 40% of the employee's gross compensation (the rate depends on the work-activity performed by the company, the number of employees of the company, and the employee's position), and is shared as follows:

  • Employer's charge is around 30%.
  • Employee's charge is around 10%.