As a result of COVID-19, Italy will not increase the VAT/IVA rates as planned in 2021.
The Italian Council of Ministers (Consiglio dei Ministri) approved a decree which includes, amongst other measures, a reversal in their decision to increase the VAT rates as of 1 January 2021. Initially planned for 2020, the increased VAT rates in Italy were as follows:
- An increase in the standard rate from 22% to 25% on 1 January 2021, with a further increase to 26.5% planned for 1 January 2022.
- An increase in the reduced VAT rate from 10% to 12% from 1 January 2021.
This decision is based on measures taken to mitigate the effects of the COVID-19 pandemic. As a result, VAT rates will remain the same in Italy in 2021 and for the foreseeable future.