Regulatory updates - Italy

Following the Council of Ministers' final approval on December 22, 2025, Legislative Decree no. 10 dated January 19, 2026, the new Consolidated VAT Code (Testo Unico IVA) was published in the Official Gazette.  This reform aims to streamline Italy's value-added tax system by merging regulations such as Presidential Decree No. 633/1972 and Decree Law No. 331/1993 into a unified code. Additionally, the consolidation seeks to simplify regulatory consultation and align Italian VAT rules with EU Directive 2006/112/EC. 

While primarily focused on bringing together VAT rules previously spread across multiple sources into a more accessible structure, the Consolidated VAT Code also introduces targeted updates and practical clarifications. Key aspects include: 

• A modernized export evidence rule for extraEU supplies: the Consolidated VAT Code now requires non-taxable exports to be supported by a customs exit proof (prova di uscita doganale); 

• E-invoicing regulations regarding issuance, transmission, and storage are now integrated in one place, along with provisions for electronic storage and transmission of receipts. Previously distributed across various regulations, these e-invoicing rules now have a cohesive placement to facilitate interpretation and application; 

• Incorporation of digital reporting requirements for daily receipts (corrispettivi giornalieri) and the framework for pre-filled VAT returns; and 

• Updated regulatory references and rate tables. 

Businesses have approximately one year to adapt to the new provisions. Some key recommended actions include revising internal procedures for invoicing and VAT compliance, updating invoice templates with new references to Consolidated VAT Code articles, and verifying the correct application of tax rates against the Code’s criteria. 

The decree officially entered into force on January 31, 2026, but most consolidated provisions will take effect on January 1, 2027. This represents a one-year delay from the draft act, providing businesses more time to adapt to the changes. 

Italy's 2026 Budget Law, which entered into force on January 1, 2026, introduced a new automated procedure to speed up VAT collection when annual VAT returns are omitted (Art. 54bis.1 DPR 633/1972). 

Italy's VAT control model increasingly relies on digital transaction data. When an annual VAT return is omitted or unusable for VAT calculation, the tax authority can now utilize existing e-invoicing and related digital VAT data streams to calculate an amount and send a formal communication to the taxpayer. The taxpayer has 60 days to pay or provide corrections before collection proceedings begin. 

If the taxpayer pays within 60 days of notification, the penalty is reduced to one-third of the assessed amount. If the taxpayer's information results in a revised assessment, a new communication is issued, and the 60-day period restarts.  

The Revenue Agency’s (Agenzia delle Entrate) automated calculation uses data such as e-invoices submitted via SDI, telematic daily receipts, and periodic VAT communications (Liquidazione Periodica IVA, LIPE). 

It should be noted that payments already made are considered, while unused VAT credits from the prior period are not included in initial calculations, potentially resulting in differences from the taxpayer's actual VAT position. 

This change emphasizes the importance of e-invoicing data quality, as the same datasets used for compliance support automated enforcement when filings are missing. 

On October 31, 2025, the Italian Revenue Agency (Agenzia delle Entrate, AdE) announced operational rules for the mandatory linking of electronic cash registers (registratori telematici) with electronic payment instruments, such as POS systems.  

This requirement, established by the 2025 Budget Law, applies to transactions from January 1, 2026. No physical connection is required; instead, merchants will use a dedicated online service in the reserved area of AdE's website. 

New operational procedures 

Merchants, either directly or through an intermediary, must access the reserved area to link the serial number of their electronic cash register (already registered in the Tax Registry) with the identification data of their electronic payment instruments. If daily receipts data are transmitted using AdE's web procedure, the linking can be completed within that procedure. These new features will be available in early March, beginning on a date to be announced on the institutional website. 

Gradual registration deadlines 

For instruments already in use on January 1, 2026, or used between January 1 and January 31, 2026, registration must be completed within 45 days from when the online service becomes available. 

Once fully operational, when first linking a payment instrument or making changes, registration must be completed between the sixth day and the last working day of the second month after the instrument becomes effectively available. 

The provision outlining the operational rules is available on AdE’s website.