(Last updated: 7 Nov 2012)
Taxation
Italian citizens and businesses are among Europe’s most highly taxed, which often discourages new business start-ups. A Valued Added Tax (in Italian the abbreviation is ‘IVA’) assessed on the duty-paid value, is levied on most goods, both imported and domestic. The most common rates are 20 per cent and 10 per cent (the latter is most commonly used for services, eg. restaurants, hotels, catering and for some categories of foods and animals) with a lower rate for basic necessities.
A reduced rate of four per cent applies to necessities (such as basic foods, fertilisers, cereals for zootechnical use, orthopaedic devices, newspapers and books). Raw materials, such as cotton and minerals, are exempt.
Italy has a very complex taxation system, with a plethora of direct and indirect taxes including:
- registration tax
- land registration taxes
- stamp tax
- stock transfer tax
- gift tax
- municipal tax on productive activities (ICIAP)
- municipal tax on buildings (ICI)
Frontier surtax, equivalent to the internal manufacturing tax, is levied on a number of products, including alcoholic beverages, tobacco and tobacco products, sugar, some products containing sugar, cocoa beans and their products.
Italy imposes variable levies (on grain products) and quotas (on meat, cheese, bananas) as required by the European Union. In general, if an Australian food product is imported into one EU member state it can be transshipped to Italy, provided it has a label written in Italian, and provided the product does not present a public or animal/plant health risk.
However, if the product is directly imported into Italy it must meet all Italian food safety and quality standards, as well as Italian labelling and packaging regulations. Many of these standards and regulations have been harmonised within the EU. For example, the EU has adopted a number of regulations covering production standards, analytical characteristics, product specifications, allowable additives, and labelling. Specific EU regulations exist for cocoa and chocolate products, sugars, fruit juices, fruit jams and jellies, milk and casein products.