In Italy you have 30 days for registering a VAT number since starting selling there. If you are not registering the VAT number in time or you started the registration but it takes longer you will have to pay penalties, the amount of penalties depends if you are the one reporting the delay or the italian government discover it.


Currently there are 2 options:


Option 1: penalties imposed by the italian tax authorities if they discover a late or a missed payment

Option 2: the Ravvedimento Operoso, italian for "voluntary disclosure"  which are also penalties in case of a late payment. The voluntary disclosure is when you voluntary declare that you are late with the VAT payment, and in this case the penalties you have to pay are much smaller than if the italian tax authorities would have discovered it.




PENALTIES IMPOSED BY THE TAX AUTHORITY IN OPTION 1:


The standard penalty rate (if the italian tax authorities discover it) is of 30% (maximum) of the missed payment, however:

  • If the late payment is made within 14 days from the missed deadline, the penalty is reduced to 15%, and the interest is 1/15 per day;
  • If the late payment is made within 15 days and 90 days, the penalty is fixed to 15%, with the interest rate fixed to 0.1%
  • If the late payment is made above 90 days, the penalty is fixed to 30%, with the interest rate fixed to 0.1%


Interest rate is calculated on the amount of VAT not paid on time.




VOLUNTARY DISCLOSURE (RAVVEDIMENTO OPEROSO) OPTION 2:


In the circumstances a taxpayer is honest, they are allowed to self-calculate and pay the penalties and interest themselves. This will save you money because you will pay reduced penalty rates compared to option 1. There are 6 different scenarios:


  • Sprint” disclosure If the late payment is made within 14 days from the missed deadline, the penalty is reduced to a daily 0.1%, to be calculated on the number of days, therefore up to a total of 1.4% if the number of delayed days is 14, otherwise multiply 0.1% by the number of delayed days and you will find the penalty rate. This rate will then apply to the amount of VAT overdue;
  • “Brief” Disclosure If the late payment is made within 15 days and 30 days, the penalty is reduced to a fixed 1.5% to be calculated on the amount of VAT overdue;
  • “Intermediate” Disclosure If the late payment is made within 31 days and 90 days, the penalty is reduced to a fixed 1.67% to be calculated on the amount of VAT overdue;
  • “Long” Disclosure If the late payment is made within 91 days and 365 days, the penalty is reduced to a fixed 3.75% to be calculated on the amount of VAT overdue;
  • “Bi annual” Disclosure If the late payment is made within 366 days and 730 days (2 years), the penalty is reduced to a fixed 4.29% to be calculated on the amount of VAT overdue;
  • “Very Long or Ultra Bi Annual” Disclosure If the late payment is made over 731 days, the penalty is reduced to a fixed 5% to be calculated on the amount of VAT overdue;


INTEREST RATE


Sprint” disclosure daily 0.1% interest rate, it means as per the penalty rate, the interest rate needs to be calculated on the number of days;


Any other disclosure fixed 0.1% interest rate, calculated on the amount of VAT overdue.


The above is to be applied to both EU and non EU based companies. However in a case of non EU companies there is an additional requirement – to submit a F24 payment form(standard form for paying taxes).