Regulatory updates - Italy

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.  

On July 14, 2025, the Italian Council of Ministers approved the draft Consolidated VAT Code (Testo Unico IVA ), which aims to streamline the country's VAT regulations. The new code is set to become effective on January 1, 2026, with the decree formally entering into force the day after its publication. The draft is currently under review by parliamentary committees.

The consolidated VAT Code transposes multiple existing regulations into a unified framework consisting of 171 articles. This integration includes Presidential Decree 633/72, Decree Law no. 331, and various other complementary VAT provisions. The structure has been designed to align with the European Union VAT Directive (2006/112/EC) and addresses both national and intra-community operations.

While the primary purpose of this consolidation is to rationalize existing rules, the code also introduces some targeted updates. Some key aspects include:

• A modernized evidentiary regime for export VAT non-taxability for exports outside the EU, with specific requirements for customs exit proof (prova i uscita doganale);
• Consolidated rules governing electronic invoice issuance, transmission, and storage;
• Incorporation of digital reporting requirements for daily receipts (corrispettivi giornalieri) and pre-filled VAT returns; and
• Various refinements to the rate tables.

Businesses should note that when the code comes into effect, references used in invoicing and accounting procedures will need to be updated to align with the new consolidated framework.