How does italian VAT refund work for non-residents? 

VAT paid in Italy by non-resident VAT-registered entities can generate a VAT credit, which gives rise to a right to a refund. 

At the same time, this right is also recognized for Italian entities fulfilling VAT obligations abroad. 

The Italian VAT return procedure varies depending on the category of the applicant and can be distinguished as follows: 

• Italian residents who have carried out transactions abroad (art. 38-bis.1); 

• Non-residents directly identified in Italy or who have appointed a fiscal representative (art. 35-ter and art. 17 DPR 633/1972); 

• VAT-registered entities resident in EU Member States that have carried out transactions in Italy (art. 38-bis.2); 

• Entities opting for special VAT schemes in Italy pursuant to arts. 74-quinquies, 74-sexies, and 74-sexies.1 of DPR 633/1972 (art. 38-bis.3); 

• VAT-registered entities resident in non-EU countries that have carried out transactions in Italy (art. 38-ter); 

• VAT-registered entities resident in the UK, Norway, Switzerland, or Israel that have carried out transactions in Italy. 

The following sections provide a detailed analysis of each specific case. 

Non-residents directly identified in Italy or through a fiscal representative 

Non-resident entities that are either directly identified in Italy or have appointed a fiscal representative in Italy are treated on the same footing as Italian VAT-registered entities. Accordingly, they may request italian VAT refund following the ordinary procedure set out in Articles 30 and 38-bis of Presidential Decree 633/1972: 

• Within the annual VAT return; 

• By submitting an application using the TR form, in the case of intra-annual refunds. 

The competent office of the Italian Revenue Agency depends on the method of identification: 

• If the non-resident entity is directly identified in Italy, the refund request is handled by the Operational Centre of Pescara; 

• If the non-resident entity has appointed a fiscal representative in Italy, the refund request is handled by the Revenue Agency office corresponding to the tax domicile of the representative. 

For further details, see the articles dedicated to direct identification and fiscal representation. 

The VAT tax refund in Italy procedure is accessible subject to certain conditions regulated by Article 30. 

In particular, paragraph 1 of Article 30 provides the taxpayer with the right: “to carry forward the excess VAT as a deduction in the following year, or to request a refund in the cases referred to in the subsequent paragraphs, and in any case upon cessation of business.” 

Conditions for italian VAT refund 

The deductible amount refers to what is reported in the annual VAT return, taking into account the increase of amounts paid monthly, net of the related tax. 
Any excess resulting in a credit balance may either be carried forward to the following year or requested as a refund, provided that the conditions set out under Article 30 of Presidential Decree No. 633/1972 are met: 

• The VAT credit requested for refund must exceed EUR 2,582.28; 

• The taxpayer must fall under at least one of the additional conditions listed under letters (a)–(e) of paragraph 1, Article 30, namely: 

1. The average VAT rate on output transactions is lower than that on input transactions; 

2. Non-taxable transactions exceed 25% of total transactions; 

3. Purchase or construction of capital goods; 

4. Transactions not subject to VAT due to lack of territorial nexus; 

5. Non-resident entities directly identified or represented in Italy; 

6. Taxable persons carrying out mainly or exclusively non-taxable transactions pursuant to Articles 8, 8-bis, and 9. 

A refund application is also admissible for amounts below EUR 2,582.28 in the following cases: 

• Cessation of business; 

• Where the annual VAT returns of the two previous years show deductible excess amounts. In such cases, however, the refund may be requested only up to the lower amount of the excesses resulting from the aforementioned returns. 

EU- Taxable Residents Not Directly Identified in Italy 

Article 38-bis2 of Presidential Decree No. 633/1972 governs the VAT tax refund in Italy of VAT paid by non-resident taxable persons established in other EU Member States. 

The refund concerns VAT paid on: 

• Importation of movable goods; 

• Purchase of goods or services for business purposes. 

To submit a valid refund application, the following three conditions must be met: 

1. The applicant does not have a fixed establishment in Italy; 

2. The applicant has not carried out taxable transactions in Italy, except for: 

1. Transport services and related exempt transactions; 

2. Transactions subject to the reverse charge mechanism; 

3. Telecommunications, broadcasting, and electronic services; 

3. The transactions must have been carried out over a period not shorter than a calendar quarter and not exceeding one calendar year. 

How to get VAT refund in Italy? 

The refund application must be submitted through the electronic portal provided by the foreign tax administrations, and the Italian Revenue Agency must notify the acceptance or rejection of the request within four months from the date of receipt. 

Generally, the foreign taxpayer relies on an authorised intermediary. For more information on the service offered by Arletti & Partners, please refer to the dedicated service page. 

1. Time limits 

The deadline for submitting the refund application is 30 September of the calendar year following the reference period. The application may concern VAT incurred over an entire calendar year or over a period not shorter than three months. 

2. Refund thresholds 

The refundable VAT amount cannot be less than €400.00 if the reference period is shorter than one calendar year but longer than three months. If the request covers an entire calendar year, the minimum refundable amount cannot be less than €50.00.  

In the event of approval of the application, the refund is made to a foreign bank account or to a foreign postal account opened in Italy or in another EU Member State. The payment may also be made directly to a third party holding a special power of attorney. 

Ruling No. 2756/2023 

The Italian Supreme Court has ruled on VAT refunds under Article 38-bis.2 of Presidential Decree No. 633/1972. In its judgment No. 2756/2023, the Court recognised the right to a VAT refund under Article 38-bis.2 (thus for EU entities not directly identified in Italy) even in cases where the taxable person obtained identification only after carrying out the transaction, provided that: 

1. The tax authority is placed in a position to verify that the requirements for granting the refund are met; 

2. The refund request does not pursue fraudulent or abusive purposes; 

3. The identification is carried out within a reasonable period, based on the specific circumstances of the case and the justifications provided. 

Non-EU Taxable residents without a fiscal representative in Italy 

Article 38-ter of Presidential Decree No. 633/1972 governs the refund of VAT paid by non-resident entities established outside the European Union. The prerequisite is the existence of a reciprocity agreement between Italy and the third country: the refund is granted only if the country of establishment grants an equivalent right to Italian VAT taxable persons. 

All subjective and objective conditions set out in Article 38-bis.2 apply, along with additional requirements: 

1. Absence of a permanent establishment in Italy; 

2. Existence of a reciprocity condition with the country of residence of the taxable person (currently in force with Switzerland, Israel, Norway, and the UK); 

3. A link between the transactions for which the refund is requested and the business activity of the economic operator; 

4. Existence of a value-added tax or turnover tax in the non-EU State. 

In the absence of reciprocity with the non-EU country, the taxable person may request the refund through a fiscal representative, in which case all procedural rules set forth for Italian residents under Article 38-bis apply. 

For further details on the reciprocity agreements currently in force between Italy and non-EU countries regarding VAT refunds, please refer to our dedicated article. 

Italian VAT Refund Application 

The refund application must be submitted by completing Form IVA 79 (Italian Revenue Agency Provision No. 64109 of 29 April 2010), to be sent to the Centro Operativo di Pescara no later than 30 September of the year following the one to which the request refers, using one of the following methods: 

1. Registered mail with return receipt (raccomandata A/R); 

2. Courier; 

3. Hand delivery. 

The refund request must be accompanied by: 

• The original purchase invoices; 

• Documentation proving payment of the said invoices; 

• A certificate issued by the State of establishment confirming the applicant’s status as a VAT taxable person. 

The minimum VAT amount eligible for refund is €400 for quarterly applications and €50 for annual applications. 

The competent office of the Italian Revenue Agency, Centro Operativo di Pescara, will process the refund: 

• Within six months from receipt of the refund application; 

• Within eight months if additional information is requested. 

In its response No. 278/2022, the Italian Revenue Agency clarified an important principle: VAT credits obtained as a result of a successful refund procedure by non-EU residents cannot be transferred to third parties. 

Italian Taxable residents Who Have Carried Out Transactions within the EU 

Italian taxable persons who have carried out VAT transactions abroad are entitled to a refund of deductible VAT. 

The VAT tax refund in Italy concerns VAT paid on: 

• Importation of movable goods; 

• Purchase of goods or services for business purposes. 

Among the various transactions that may give rise to a refundable VAT credit are expenses incurred abroad during business trips, such as accommodation, catering, or car rental costs. In such cases, Arletti & Partners assists Italian companies in managing foreign VAT refund applications, offering operational support and dedicated consultancy. For more information, please refer to our dedicated service page. 

Refund Application 

To be eligible for a refund, certain conditions must be met: 

• The transaction must confer the right to deduction under Italian VAT law; 

• The applicant must not have a registered office or permanent establishment from which business activities are carried out in the Member State of refund; 

• The applicant must not have carried out transactions deemed taxable in the Member State of refund; 

• The applicant must not have carried out transactions subject to VAT under the reverse charge mechanism. 

It is important to note that the appointment of a fiscal representative or direct identification in the Member State of refund does not preclude access to the refund procedure under Article 38-bis.1 (see CJEU, Case C-323/12 and CJEU, Case C-242/19). 

The deadline for submitting the refund application is 30 September of the calendar year following the reference period, within the limits and according to the periodicity established by the competent Member State. 

How much is the VAT tax refund in Italy? 

The amount of VAT requested for refund may not be less than €400.00 if the reference period is shorter than one calendar year but not less than three months. The minimum refundable VAT amount may not be less than €50.00 if the request refers to an entire calendar year. 

Method of Submission of the Refund Application 

Taxable persons shall submit the refund application (Italian Revenue Agency Provision No. 53471 of 1 April 2010, § 1.3.1) through: 

• The Entratel or Fisconline electronic services; 

• Authorized intermediaries for the electronic transmission of tax returns, as provided under Article 3(2-bis) and (3) of Presidential Decree No. 322/1998 (e.g. chartered accountants); 

• Delegated persons with appropriate technical, economic, financial, and organizational capacity; 

• Italian Chambers of Commerce abroad recognized under Law No. 518 of 1 July 1970. 

The Italian Revenue Agency forwards the refund application to the Member State of refund, which must notify the Italian taxpayer of the acceptance or rejection of the request within four months. The refund of the tax by the foreign State must be executed no later than ten working days after the expiry of the deadline for notifying the decision.