VAT Settlement, LIPE Returns, and Split Payment in Italy

In a nutshell

IVA (Italian VAT) is not your cost — you collect it from customers and pass it to the State, after deducting the VAT you paid to suppliers. This periodic calculation is called VAT settlement (liquidazione IVA) and must be carried out monthly or quarterly, depending on your annual turnover. Flat-rate traders (forfettari) are exempt: they do not charge VAT and do not do settlement.

At a glance

Rates	22% standard, 10% reduced, 5% and 4% super-reduced
Payment deadline	By the 16th of the following month (monthly); by the 16th of the second month after the quarter (+1% interest surcharge, quarterly)
LIPE	Quarterly communication to Agenzia delle Entrate (Italy's tax-revenue agency), due by the last day of the month following the quarter
Where	Everything online: Agenzia delle Entrate portal or through your accountant
Documents	VAT purchase and sales registers, electronic invoices via SDI

How VAT settlement works

The mechanics are simple in principle: each period you add up the output VAT (collected from your customers) and subtract the input VAT (paid to your suppliers). The difference is what you owe the State and must be remitted via F24 (the universal Italian payment form for taxes and contributions).

If the result is negative — you paid more VAT than you collected — you accumulate a VAT credit that you can carry forward and offset against future liabilities, or apply to reclaim as a refund.

Settlement frequency is either monthly or quarterly:

• Monthly: mandatory if your previous year's turnover exceeded €800,000 (the unified threshold for goods and services, in force since 2023). Payment is due by the 16th of the following month, using F24 codes 6001 (January) through 6012 (December).
• Quarterly: available to those below the threshold; you elect it on your annual VAT return. Payment is due by the 16th of the second month after the quarter ends, with a 1% interest surcharge applied to the first three quarters. The fourth quarter has no separate payment — it rolls into the annual balance settled in March.

The F24 codes for quarterly payers are: 6031 (Q1, due 16 May), 6032 (Q2, usually 20 August), 6033 (Q3, 16 November), 6099 (annual balance, 16 March).

Some categories — hauliers and fuel distributors, for instance — are entitled to quarterly settlement by law without the 1% surcharge.

The LIPE communication

Regardless of how often you remit, every VAT-registered entity must file a quarterly LIPE (Liquidazione Periodica IVA — Italy's periodic VAT reporting form) with Agenzia delle Entrate. This is not a payment; it is a data communication covering output VAT, input VAT, amounts remitted, and credits offset.

The 2026 deadlines are:

• Q1 (Jan–Mar): 31 May 2026
• Q2 (Apr–Jun): 30 September 2026
• Q3 (Jul–Sep): 30 November 2026
• Q4 (Oct–Dec): 28 February 2027 (or alongside the annual VAT return by 30 April)

You are exempt from LIPE only if you carried out no transactions in the quarter and no payment obligation arises in subsequent quarters.

The annual VAT return must be filed by 30 April of the following year. Any balance due must be paid by 16 March (code 6099), with the option to spread it over up to nine monthly instalments with interest.

Split payment: when the public authority pays VAT directly to the State

If you issue an invoice to a public body — the central government, regions, municipalities (Comuni), ASL (Azienda Sanitaria Locale — local public-health authorities), public universities, INPS (Italy's social-security agency), INAIL (Italy's workplace-injury insurance institute), and others — the split payment mechanism applies (scissione dei pagamenti), introduced by L. 190/2014 and governed by art. 17-ter of DPR 633/72.

In practice: the public-body client pays you only the net amount (excluding VAT), while the VAT is remitted directly to the Treasury on your behalf.

Split payment also applies to:

• national, regional, and local public economic entities
• foundations where a public body holds at least 70%
• companies controlled by the Presidency of the Council of Ministers or a Ministry
• companies controlled by Regions, Provinces, Municipalities, or metropolitan cities
• companies listed on the FTSE MIB index (per the annual list published by the MEF — Italy's Ministry of Economy and Finance)

Your invoice must show the net amount, the VAT rate, and the VAT amount, and must include the wording: "Scissione dei pagamenti ex art. 17-ter DPR 633/72" (split payment pursuant to art. 17-ter DPR 633/72). The invoice must be issued electronically via SDI.

The practical effect for you: since you never actually collect that VAT, it does not appear as output VAT in your settlement. You can, however, still deduct the input VAT on related purchases, which often leads to accumulating a VAT credit that you can reclaim as a quarterly refund under art. 38-bis DPR 633/72.

Split payment does not apply to private clients, transactions subject to reverse charge, exempt or out-of-scope supplies, or suppliers on the flat-rate regime.

Reverse charge: when you pay VAT as the customer

Reverse charge (inversione contabile, art. 17 DPR 633/72) works the opposite way from split payment: it is the customer who remits VAT to the State, not the supplier. The supplier issues an invoice with no VAT and the note "inversione contabile" (reverse charge).

It applies in a range of scenarios: construction sub-contracting, sales of business-use buildings, cleaning and demolition services on buildings, B2B sales of PCs and smartphones, purchases from EU suppliers (intra-EU reverse charge), and services received from non-EU operators.

As the customer receiving a reverse-charge invoice, you make a double entry: once as a purchase (input VAT) and once as a sale (output VAT). In the settlement these two entries cancel out — the net VAT effect is nearly neutral, subject to any applicable deduction limits.

Note: even flat-rate traders must apply reverse charge on purchases from EU or non-EU suppliers. In those cases they become VAT-liable for those specific transactions, even though they normally do not charge VAT.

Mistakes to avoid

1. Using the wrong F24 code. Each month and each quarter has its own code. An incorrect code means the tax does not appear as paid, which can trigger an irregularity notice from Agenzia delle Entrate.
2. Skipping the LIPE filing. Failing to submit carries a penalty of €500 to €2,000. If you realise you're late, you can regularise through ravvedimento operoso (Italy's voluntary self-correction procedure, which reduces penalties).
3. Applying split payment to the wrong client. If you apply split payment to a company that is not on the MEF list, the unremitted VAT becomes recoverable with penalties.
4. Offsetting VAT credits above €5,000 without a compliance certificate. Without the visto di conformità from a qualified accountant, the offset is blocked.

Special cases

If you opt for the VAT cash-accounting scheme (regime IVA per cassa, art. 32-bis DL 83/2012) — available up to €2 million annual turnover — you settle VAT when you actually receive payment from the client, not when you issue the invoice. This is useful when payment terms are long. Bear in mind that input VAT on purchases is similarly deferred until you actually pay the supplier, and in any case VAT becomes due after 12 months from the invoice date even if the customer has not yet paid you.

For B2B sales to EU operators holding a valid foreign VAT number, invoices are non-taxable in Italy. You must first register with VIES and verify the client's VAT number on the European Commission VIES portal before the transaction. Without prior VIES registration, you risk double taxation.

For an annual VAT balance above €5,000 that you want to offset via F24, you need the visto di conformità from your accountant on the annual VAT return, and you must wait 10 days after submitting the return before using the credit.

Official sources

• Agenzia delle Entrate — VAT
• Agenzia delle Entrate — VAT thematic area
• Agenzia delle Entrate — Current VAT rates
• Agenzia delle Entrate — VAT settlements 2025
• Agenzia delle Entrate — Invoices and revenues
• MEF — Split payment (updated lists)
• VIES — EU VAT number verification
• Normattiva — DPR 633/1972

Legal references: DPR 633/1972, DPR 100/1998, L. 190/2014 art. 1 c. 629, DL 50/2017 art. 1, art. 17 and 17-ter DPR 633/72, DL 78/2010 art. 21-bis, DL 119/2018, L. 197/2022 art. 14, art. 32-bis DL 83/2012.