Italy opens its VAT franchise to small businesses from other EU countries from 1 January 2025

What changed in detail

Legislative Decree 13 November 2024, n. 180, published in the Gazzetta Ufficiale n. 281 of 30 November 2024, transposes Council Directive (EU) 2020/285 on the special scheme for small enterprises, together with Directive (EU) 2022/542.

Article 1 amends the forfettario rules in article 1 of L. 190/2014. Comma 57, letter b) now provides that, for VAT purposes, persons established in another EU Member State apply the franchise scheme as set out in Title V-ter of DPR 633/1972. Article 3 inserts that new Title V-ter, articles 70-terdecies to 70-duovicies, into the VAT Decree. It creates a cross-border franchise regime (regime transfrontaliero di franchigia).

Under article 70-quaterdecies, a natural person established in another Member State may apply the franchise in Italy where, in the previous calendar year, their total turnover in the Union did not exceed EUR 100,000 and their turnover in Italy did not exceed EUR 85,000, the forfettario threshold. They must first notify their Member State of establishment and obtain an identification number with the suffix “EX”. Article 5 applies the new rules from 1 January 2025.

What it means

Since 1 January 2025, a small sole trader from another EU country can supply goods or services in Italy without charging Italian VAT and without full Italian VAT registration, provided both turnover caps are respected and the EX number has been obtained. Italian buyers will see invoices without Italian VAT from such suppliers. From 1 April 2025 those invoices can carry the new FatturaPA regime code RF20 (record).

The scheme is still in force. The DPR 633/1972 articles of Title V-ter, including article 70-quaterdecies, are abrogated from 1 January 2027 and carried into the VAT Testo unico, D.Lgs. 10/2026 (record).