Sales
The whole year's turnover, broken down by rate and by type: taxable, zero-rated, exempt, outside the scope.
Businesses · Returns
Annual VAT return
It is the summary of the VAT year: every sale and purchase, every periodic settlement, the final balance. It is also the document in which you decide what happens to any credit, and that decision is often worth more than the return itself.
01 · Who is required
Who must file the annual VAT return and who need not
As a general rule the obligation applies to everyone holding a partita IVA (Italian VAT number) who carried out transactions relevant for VAT during the year. The exclusions are specifically defined and fairly narrow.
| Who | Obligation | Note |
|---|---|---|
| Businesses and professionals under the ordinary regime | Yes | Even with a zero balance or a credit |
| Taxpayers under the regime forfettario (flat-rate scheme) | No | The scheme exempts you from VAT obligations |
| Taxpayers still under the old regime di vantaggio (minimum taxpayers scheme) | No | Within the limits set by the scheme |
| Those who carried out only exempt transactions | Generally no | Except for the exceptions set by law |
| Those who ceased trading during the year | Yes | For the period of activity |
| Farmers under the exemption regime | No | Within the limits of the regime |
The return must be filed even if there were no transactions, if the VAT number was open and you are not among those exempted. Failing to file a nil return still results in a penalty.
02 · The structure
What you declare
The return reconstructs the whole VAT year, cross-checking what has already been reported in the periodic settlements and the electronic invoices that passed through the Sistema di Interscambio (SdI, the Italian e-invoicing exchange system).
Purchases
The purchases recorded, with recoverable and non-recoverable VAT, and any sector-specific restrictions.
Settlements
A summary of the periodic payments made and of any credits carried forward.
Adjustments
Adjustments to the VAT recovered on depreciable assets, and the changes of regime that make them necessary.
Pro rata
For those who also carry out exempt transactions, the year's recoverable percentage and the balancing adjustment.
Balance and destination
The final result and the choice of what to do with it: pay, carry forward, offset or claim a refund.
03 · When it is filed
Deadlines for filing and payment
The VAT return has its own window, separate from that of the income tax return: it is filed in the first months of the year following the one it refers to.
- Filing is electronic only, within the annual window provided for.
- Payment of the balance by the ordinary deadline, with the option of instalments or a deferral with a surcharge.
- Early filing by the end of February: it means you do not have to file the LIPE (the periodic VAT settlement report) for the last quarter.
- A late return is accepted within ninety days of the deadline, with a reduced penalty.
- After ninety days the return is treated as not filed, although it still serves as a basis for collecting the amounts declared.
Filing by February is a real simplification: it removes one obligation and makes the credit available for offsetting sooner. It does, however, require the accounts to be closed early, so it has to be organised in December.
04 · The decision that matters
Refund, offsetting or carrying forward
When the return closes with a credit, the choice of how to use it is made in the return itself and cannot be changed at will later. This is where the VAT return has the greatest impact on the business's cash flow.
Carrying forward
The credit moves to the following year and is used in the periodic settlements. No formalities, no threshold, no visto.
Offsetting
The credit is used in the F24 (the Italian tax payment form) to pay other taxes and contributions. Above a certain threshold the visto di conformità (the compliance certification) is needed, and the payment goes through the Revenue Agency's electronic channels.
Refund
It can only be claimed when specifically defined conditions are met. Above a certain threshold, the visto or a security (surety) is needed. It does not come quickly.
Combination
The three routes are not mutually exclusive: part refunded and part offset is a frequent and legitimate choice.
When you can claim a refund
The cases are set by law, not discretionary.
- Average VAT rate on purchases higher than the rate on sales
- Zero-rated transactions above a certain share of the total
- Purchase of depreciable assets of a significant amount
- Cessation of the business
- Transactions outside the scope of VAT with foreign parties
05 · When it is needed
The visto di conformità
The visto is a certification, issued by an authorised professional, that the figures in the return match the documentation and the accounting records. It is needed above certain thresholds of credit used for offsetting or claimed as a refund.
- It is required for offsetting the credit against other taxes above the annual threshold provided for.
- It is required, as an alternative to a security, for a refund above the threshold provided for.
- It presupposes a real documentary check: registers, invoices, consistency between what is declared and what is recorded.
- Whoever issues the visto is liable for the conformity they certify: it is not a formal rubber stamp.
- In some specific situations the visto is not enough and a security (surety) is still required.
If you plan to offset or claim a refund of a significant credit, the accounts must be kept with the visto in mind throughout the year. Reconstructing them in March to obtain the certification is possible but costly.
06 · If there is a mistake
Correcting a return already filed
Mistakes are corrected with an amended return (dichiarazione integrativa). The route changes depending on whether the mistake produced an amount due or a credit.
- Amended return against you, when the correction shows a higher amount due: you pay the difference with a penalty reduced through ravvedimento (voluntary correction), plus interest.
- Amended return in your favour, when the correction shows a higher credit: the credit is used under the rules that apply for the year in which the amended return is filed.
- Corrective return within the deadline, if you notice the mistake before the due date: it entirely replaces the previous one with no penalty at all.
- The time limits for the amended return are the same as the limitation period for assessments for that year.
Frequently asked
The questions that keep coming up
If I am on the flat-rate scheme, do I have to file it?
No. The flat-rate scheme exempts you from VAT obligations, so there are no periodic settlements and no annual return.
The obligation appears in the year you leave the scheme. If you leave it immediately because you exceeded the higher limit, the return must also be filed for that year.
How long does it take to get a VAT refund?
It depends on the amount, on whether there is a visto or a security, and on the taxpayer's profile. The procedures for modest amounts with a visto are quicker than those requiring a security.
In practice you are looking at months, not weeks. When you need the credit straight away, offsetting is almost always the faster route.
I filed the fourth-quarter LIPE and then the return. Is that a problem?
No. The fourth-quarter LIPE can only be left out if the return is filed by the early February deadline. Having sent it anyway has no consequences.
The opposite does: leaving out the report without meeting the early filing deadline for the return results in the penalty for failing to report.
Is the VAT return filed together with the income tax return?
No, they have separate windows. The VAT return is filed in the first months of the year; the income tax return has a much later deadline.
Merging them has been proposed several times, but it does not exist today: they are two separate obligations, with their own deadlines and forms.
Let's talk
A VAT credit is cash: decide what to do with it, do not just let it happen
Refund, offsetting or carrying forward are three routes with different timings and requirements. The choice is made in the return and is binding for the year.