Italy raises VAT registration threshold for SMEs

Tue 10th Sep 2013

The European Commission (EC)has authorised the Italian VAT registration threshold to be raised from Euro 30,000 to Euro 65,000 from the start of 2014.

Derogation from EU VAT Directive

The EU VAT Directive, which governs the member states’ VAT system, generally offers the scope for countries to raise their VAT registration threshold for resident companies to up to Euro 100,000.  This is to offer countries to opportunity to reduce the administrative burden on smaller businesses.  This provision is held within Article 285 of the VAT Directive 2006/112/EC.

In April, the Italian VAT authorities applied for such an exemption to extend their current threshold to Euro 65,000.  It had already received a derogation from the usual Euro 5,000 limit in 2008.  The European Union has now granted this, and also indicated that Italy may extend this further in subsequent years (to allow for inflation).

Companies may still voluntarily register for VAT if they are below the threshold.  This does not impact non-resident VAT traders.  See here for a list of all EU VAT registration threshold