Set up Italian taxes in your Shopify store

This article covers:

• Tax settings
  • Display product prices including VAT
  • Display product prices excluding VAT
• Tax rates in Italy and the EU
• Selling goods to customers in Italy
  • My business uses the regime forfettario
  • My business is VAT registered
• Selling goods to customers in other EU Member States
  • Selling as a micro-business
  • Surpassing the micro-business threshold
  • Selling with a country-specific registration
  • Selling digital services
• Selling goods outside the EU
• Where to find further information
• Invoices

To charge VAT to some customers and not to others, Shopify lets you configure how VAT is displayed in product prices in your online store.

If you sell to consumers (B2C), display your product prices including VAT.

Under Italian and EU consumer protection rules, prices shown to consumers must include VAT, and any additional delivery charges must be shown before checkout.

To display your product prices with VAT included:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Additional configuration section, turn on Include sales tax in product price and shipping rate.
3. Click Save to apply the changes.

You can also enable dynamic tax inclusion, a Shopify feature that automatically includes or excludes VAT based on the customer's region and adjusts the tax rate accordingly, so you don't need to manage this manually for every market.

Tax display is set for each market. To activate dynamic tax inclusion:

1. In your Shopify admin, go to Markets and click the market you want to configure.
2. In the Inherited section, click the + icon next to Taxes and duties.
3. Under Tax display, select Dynamic tax display, then click Done.
4. Click Save to apply the changes.

If your store sells exclusively to businesses (B2B), you can display prices excluding VAT, since B2B buyers typically expect to see net prices before tax.

To display your product prices excluding VAT:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Additional configuration section, turn off Include sales tax in product price and shipping rate.
3. Click Save to apply the changes.

To disable dynamic tax inclusion in a market and show VAT as a separate line at checkout:

1. In your Shopify admin, go to Markets and click the market you want to configure.
2. In the Inherited section, click the + icon next to Taxes and duties.
3. Under Tax display, select Show as line item, then click Done.
4. Click Save to apply the changes.

As of 2026, the standard VAT rate (IVA, or imposta sul valore aggiunto) in Italy remains 22%.

Reduced VAT rates of 10%, 5%, and 4% apply to specific categories of goods and services, including certain food products, beverages, books, newspapers, and medicines.

Since 2025, a reduced 5% rate has also applied to qualifying sales of works of art, antiques, and collectors' items, subject to specific conditions.

The applicable VAT rate depends on the classification of the product or service.

How you handle VAT on domestic sales depends on whether your business uses the regime forfettario or the standard VAT regime.

In Italy, eligible sole traders and self-employed professionals can use the regime forfettario, a simplified tax regime under which they generally don't charge VAT on domestic sales.

Businesses using this regime still have an Italian VAT number (partita IVA), but they can't deduct input VAT on their business purchases.

The regime is generally available if your revenue in the previous year didn't exceed €85,000 and you meet the other eligibility requirements.

If your revenue exceeds €85,000 but not €100,000 during the year, you leave the regime from the following year.

If it exceeds €100,000, the regime stops applying during the current year, and VAT becomes due from the transaction that takes you over the threshold.

If your business is based in Italy and uses the standard VAT regime, you charge Italian VAT on domestic sales of goods to both businesses (B2B) and consumers (B2C).

For sales to customers outside Italy, the rules depend on where your customer is located.

When selling goods B2B to other EU member states, these sales are intra-Community supplies without Italian VAT (non imponibile IVA), as long as your customer has a valid EU VAT number and the goods are transported to another member state.

You must verify the customer's VAT number, keep evidence of the transport, state the VAT treatment on your invoice, and report these sales in your intra-Community lists (elenchi Intrastat). The customer accounts for the VAT in their own country.

When selling goods B2C to other EU member states, you do charge VAT, but the rate depends on whether your sales exceed the €10,000 EU threshold.

If your cross-border B2C sales to other EU countries (distance sales of goods plus telecommunications, broadcasting, and electronic services) stay at or below €10,000 (excluding VAT) in both the current and the previous calendar year, you can apply Italian VAT to those sales.

This rule only applies if your business is established only in Italy and your goods are shipped from Italy.

No application or approval is needed—simply set up your tax settings in Shopify admin. This only needs to be done once.

You can also choose to apply the customer's country rate from the first euro, but that choice binds you for two calendar years.

To charge Italian VAT on eligible cross-border B2C sales:

1. In your Shopify admin, go to Settings → Taxes and duties.
2. In the Tax regions section, click European Union.
3. In the Collect VAT cross-border section, click Collect VAT.
4. In the Collect across the EU window, select Collect using your home country registration.
5. Select your Country of registration and enter your VAT number. Leave this field blank if you've applied for a VAT number but don't have one yet; you can add it later.
6. Click Collect VAT to save your changes.

Once your combined cross-border B2C sales exceed €10,000 (excluding VAT) in the current or the previous calendar year, you must charge the VAT rate of the country you're shipping to.

In practice, this means customers in different EU countries will be charged different VAT rates, with standard rates ranging from 17% to 27%.

Registering for VAT separately in each EU country you sell to is time-consuming.

The One-Stop Shop (OSS) Union scheme addresses this issue. You still charge VAT at the rate of the customer's country, but you can report the VAT on your eligible cross-border B2C sales through a single OSS return in Italy.

OSS doesn't replace your domestic VAT return or local registrations where they're required.

Shopify calculates VAT based on the tax settings and registrations you've configured.

To set VAT rates for the OSS scheme and charge your customers' shipping-country VAT rate on eligible cross-border B2C sales:

1. In your Shopify admin, go to Settings → Taxes and duties.
2. In the Tax regions section, click European Union.
3. In the Collect VAT cross-border section, click Collect VAT.
4. In the Collect across the EU window, select Collect using a One-Stop Shop (OSS) registration.
5. Select your Country of OSS registration and enter your VAT number. Leave this field blank if you've applied for a VAT number but don't have one yet; you can add it later.
6. Click Collect VAT to save your changes.

From now on, your customers' shipping-country VAT rate will apply automatically to eligible cross-border B2C sales.

You need a local VAT registration in another EU country if you make taxable sales there that OSS doesn't cover, for example, if you store stock in that country and ship to customers from there.

In that case, you can no longer use the €10,000 threshold.

If that's your situation, add the local VAT registration number to your tax settings. In Shopify, you can add a local VAT registration number for any additional country, and the correct rate will be applied automatically based on that registration.

To add a local VAT registration number:

1. In your Shopify admin, go to Settings → Taxes and duties.
2. In the Tax regions section, click European Union.
3. In the Collect VAT in an EU country section, click Collect in another location if you already have a registration.
4. Select the Country and enter your VAT number. Leave this field blank if you've applied for a VAT number but don't have one yet. You can update it later.
5. Click Collect VAT to save your changes.

The country must be part of one of your shipping zones before you can add it as a tax region. If you can’t select it, create a shipping zone first:

1. In your Shopify admin, go to Settings → Shipping and delivery.
2. In the Shipping profiles section, click the profile you want to add the zone to (for example, General profile).
3. In the Shipping zones section, click + Zone.
4. Name the zone, add the country (or countries) you’re VAT-registered in using the search bar, and click Done.
5. Add shipping rates to make the zone available.
6. Click Save to apply the changes.

Special VAT rules apply when selling digital services from Italy to customers in other EU countries.

Electronically supplied services include downloadable music, e-books, digital photographs, and automated online courses.

Not every service delivered over the internet qualifies—for example, a live online course taught by a person may be treated differently.

For B2C sales, digital services count toward the same €10,000 EU threshold as your distance sales of goods.

Within the threshold, you can keep applying Italian VAT. Once you exceed it, you charge the VAT rate of the customer's country and can report it through the same OSS Union scheme.

If you sell digital services to businesses with a valid EU VAT number, the customer accounts for the VAT under the reverse charge.

If you’re selling goods from Italy outside the EU, whether B2B or B2C, these exports are zero-rated for Italian VAT (non imponibile IVA).

As long as the goods actually leave the EU and you keep proof of export, such as the customs export declaration and its exit confirmation.

The legal basis is Article 8 of DPR 633/1972 until December 31, 2026, and Article 45 of the new VAT Consolidated Act (Testo Unico IVA, Legislative Decree 10/2026) from January 1, 2027.

For official guidance, see the Agenzia delle Entrate website. For personalized advice based on your specific business situation, consider consulting a tax professional or accountant who specializes in VAT and ecommerce.

Once your tax rates are set up correctly, Sufio automatically generates and sends invoices, credit notes, and other required documents with a clear VAT breakdown.

Invoices can be created in different languagesand include all the necessary details to make them compliant with invoicing legislation in the EU.

Issuing invoices with the correct tax breakdown is crucial for your bookkeeping and tax purposes.

Sufio invoices display all required information, including the VAT registration numbers (P.IVA, or Partita Imposta sul Valore Aggiunto) of both your store and your business customers, as well as your customers' Codice Fiscale (C.F.).