Italy’s Council of Ministers has given preliminary approval to a Legislative Decree that will create a new consolidated code on value added tax (VAT), set to take effect from January 1, 2026. This long-anticipated “Testo Unico IVA” (New VAT Code) will streamline decades of fragmented VAT legislation into a single, coherent framework.
This is Italy’s comprehensive reform that brings together all of its value added tax (VAT) rules into a single, organized legal document. It consolidates decades of Italian VAT legislation—previously scattered across various decrees, amendments, and laws—into one structured code, making the rules clearer, easier to navigate, and aligned with EU directives.
See more in our Italian country VAT guide.
VAT law reforms and simplifications
Announced on 14 July 2025, the reform is part of Italy’s broader tax overhaul under Law No. 111/2023. It reorganizes the current VAT provisions—principally found in Presidential Decree No. 633/1972 (covering domestic transactions) and Legislative Decree No. 331/1993 (covering intra-EU transactions)—into one legislative text comprising 171 articles across 18 titles. The new structure closely mirrors the EU’s VAT Directive (2006/112/EC), ensuring greater alignment with the common European VAT system.
This is more than a mere consolidation. It repeals the existing scattered laws, incorporates numerous updates developed over time—including provisions affecting art, antiques, and collectibles—and aims to reduce interpretation challenges by simplifying the legal architecture.
Several notable operational changes will impact businesses, especially those involved in cross-border transactions:
Export documentation: Under the current system, businesses could prove goods left the EU using various documents, including paper forms like the “bolla di accompagnamento.” The new VAT Code (Article 45) requires exclusively digital customs evidence via the Automated Export System (AES), in line with EU Regulation 2447/2015. This ensures a uniform, digital approach to documenting exports.
E-invoicing integration: The Testo Unico fully embeds rules for electronic invoicing, digital reporting of daily receipts (corrispettivi telematici), and pre-filled VAT returns into the core VAT legislation for the first time. This move highlights Italy’s push to leverage technology for streamlining compliance and reducing administrative burdens on businesses.
Digital services rules: The new code also formalises place-of-supply rules for digital services, including streaming events, clarifying where VAT is due in the rapidly growing online economy and aligning with EU guidelines.
Italy’s government sees this overhaul as essential for modernizing its VAT regime, making it clearer and more business-friendly while maintaining consistency with EU law. Final approval procedures are expected to continue in the coming months, with businesses advised to prepare for the updated rules well ahead of the January 2026 start date.