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VAT Group in Italy

A VAT code for corporation group

VAT for group of companies in Italy

The VAT of group of companies regulation in Italy includes:


- article 73, paragraph 3, Dpr 633/1972;

- Ministerial Decree of 13 December 1979 containing implementing provisions;

- Budget Law 2017 (which has fully replaced Article 73, paragraph 3);

- decree of the Minister of Economy and Finance (DM 13 February 2017) containing implementing provisions.

The liquidation of VAT of group of companies in Italy is a particular taxation mechanism applied to corporation groups.


The procedure provides that:

- periodic payments;

- the balance payment of the end of the year;

- and its concerning fulfillments;

are carried out by the mother company which determines:


- the VAT due, or

- the VAT group's credit.


Through a system of internal compensation of VAT debts and VAT credits emerging from:

- periodic liquidations;

- annual statements of the companies of the group.


Under the VAT group regime, the group of companies is considered as a single VAT taxable entity, so that:

- transactions carried out between the companies of the group will not be subject to VAT;

- transactions carried out between a company member of the group and a third party will be considered as being made by the group as a single entity.


The VAT group procedure is an option, which can be exercised under the conditions required by law.


DM 13 February 2017 states that VAT group payments that may be made by an entity or a mother company are:

- monthly payments to be made no later than 16th of each month (Article 1, Dpr 100/1998);

- payments concerning minor taxpayers, to be carried within 16th of the second month following each of the first three quarters of the year (Article 7, paragraph 1, letter a, Dpr 542/1999);

- payments relating to particular sectors (Article 74, Dpr 633/1972).


The provision for the submission by an entity or by a mother company of the annual declarations of the subsidiaries was repealed.


The following kinds of companies are considered as subsidiaries:

- joint stock company (società per azioni);

- limited partnership with shares (società in accomandita per azioni);

- limited liability (società a responsabilità limitata);

- general partnership (società in nome collettivo);

- limited partnership (società in accomandita semplice);

whose shares are owned by a shareholder or by the controlling company (or by another company controlled by this latter) for more than 50% of the capital, at least from 1st July of the preceding calendar year.


The percentage of control must be calculated without taking into account the shares without the right to vote; the parent companies (which are controlled by another company) may choose the option of VAT group liquidation only if the company controlling them renounces to choose it.


An entity or a mother (parent) company must report to the Revenue Agency the option made for the liquidation of the VAT group, no more by the VAT model 26, but by the annual VAT statement presented in the calendar year when the option has been made.


The statement of the mother company must contain:

- the VAT ID code of the subsidiaries;

- the communication relating to each subsidiary;

- the proof of the control over the subsidiary, specifying the percentage of shares of the subsidiaries and the date from which started the possess of the shares.


If the mother company is controlled by another company, the statement must contain the waiver of the latter to the VAT group option.


The option is effective until revocation.


The revocation must be exercised in the same manner and within the same terms as the communication of the option.


Any change in the data relating to the subsidiary companies during the year must be communicated to the Revenue Agency within 30 days, using the VAT model 26.


The supervening failure to meet any of the required requirements will have effect from the date of periodic liquidation of VAT for the month or quarter during which it occurred.


Since 2018, communication via the annual VAT statement is the only way to exercise the option.

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