Rates, taxable amount and scorporo

A plumber in Bologna is paid 1,220 € including VAT for a bathroom repair. He books 22 % of the 1,220 €, that is 268.40 €, as VAT owed. The right figure is 220 €. The 48.40 € gap is not rounding: it comes from applying the rate to the wrong base, and it repeats on every receipt handled the same way.

What Italian VAT applies to

The Agenzia delle Entrate states the scope in one sentence. VAT applies to supplies of goods and services made in the territory of the State in the course of a business, an art or a profession, and to imports made by anyone. Three conditions sit in that sentence: a supply, a place, and an activity.

The mechanism that follows is the one every European system shares. The business charges the tax to its customer and pays it over to the Treasury, the Erario. At the same time it has the right to deduct the VAT it paid to its own suppliers on purchases.

The business is therefore a collector, not the one who bears the tax. What it pays over in each period is a difference: tax charged on sales minus tax paid on purchases that give a right to deduction. That difference is the subject of the second module, the periodic settlement.

The same page adds that settlement and payment happen monthly or quarterly. Keep that in mind while reading this module: every figure computed here, invoice by invoice, will end up in a register and then in a settlement. Errors made at invoice level travel all the way to the payment.

The volume d'affari is not a profit figure and not a cash figure. It is built from taxable amounts, net of VAT, and it counts transactions that bear no tax at all, such as exempt ones. It matters later, because the right to settle quarterly is tested against it.

Inside that volume, tax is generally due only on taxable transactions, the operazioni imponibili. Non-taxable and exempt transactions belong to the turnover without generating any VAT to pay. The Agenzia adds that the tax applies at proportional rates that differ with the type of transaction.

Four rates and where they come from

The Agenzia's page on general rules and rates gives one standard rate and three reduced ones. The standard rate is the default: it applies whenever no provision places the goods or the service under a reduced rate. The reduced rates apply only to specific goods and services.

The examples next to each reduced rate are only examples. The Agenzia says so itself and refers to the complete list: Table A, parts II, II-bis and III, annexed to Presidential Decree 633 of 1972. Whether a product qualifies is read in that table, never guessed from a neighbouring product.

The consolidated text of article 16 of that decree, as served by the Gazzetta Ufficiale, says the same in legal form. The rate is twenty-two per cent of the taxable amount of the transaction, reduced to four, five and ten per cent for the goods and services of parts II, II-bis and III of Table A.

Two words in that sentence carry the whole method of calculation. The rate is applied to the base imponibile, the taxable amount of the transaction. It is not applied to the price the customer pays, which already contains the tax. Everything in the next section follows from those two words.

The article also reserves the provisions of article 34, which concerns special schemes, among them agriculture. A business under a special scheme should not assume that the four rates tell its whole story. This course deals with the ordinary case: a business making taxable supplies and deducting VAT on its purchases.

One invoice may carry several rates. A shop selling both goods at 22 % and goods at 10 % shows each taxable amount with its own rate and its own tax. The register of issued invoices keeps the same split, amount and tax by rate, which is why the split must be right from the first line.

A practical consequence follows for price lists. A business showing consumers VAT-inclusive prices has in effect already chosen a rate for each item. If a rate is wrong in the list, every scorporo made from it will be wrong too, however carefully the division is done. Checking each item's rate once costs less than correcting each receipt.

From taxable amount to total, and back

The forward direction is the simple one. You know the taxable amount, you multiply it by the rate, you round the tax to the cent, and you add it to the taxable amount to obtain the total. At 22 %, a taxable amount of 1,000 € gives a tax of 220 € and a total of 1,220 €.

The reverse direction is where businesses go wrong. When the only figure known is a VAT-inclusive price, as with a receipt or a price list shown to consumers, the taxable amount must be extracted first. In Italian practice that extraction is called scorporo, literally taking the tax out of the price.

Because the tax is a percentage of the taxable amount, the total equals the taxable amount multiplied by one plus the rate. To find the taxable amount you divide the total by one plus the rate: by 1.22 at the standard rate, by 1.10 at 10 %, by 1.05 at 5 % and by 1.04 at 4 %.

Taking 22 % off the total is the plumber's mistake from the opening lines. It treats the total as if it were the base. The error grows with the rate: at 22 % it overstates the tax by close to a fifth, at 4 % by far less, so it can go unnoticed where most sales are at reduced rates.

The check at the end of the example is worth keeping as a habit. After a scorporo, add the taxable amount and the tax you found. If the sum is not the total you started from, one of the two was computed on the wrong base, or the rounding was taken in the wrong place.

Rounding follows the direction of the calculation. Going forward, the tax is rounded and the total follows by addition. Going back, it is the taxable amount that is rounded, and the tax is whatever remains. Done this way, taxable amount plus tax equals the total to the cent in both directions.

• Identify the rate from Table A for each good or service, not from habit
• If you hold a taxable amount, multiply by the rate and round the tax to the cent
• If you hold a VAT-inclusive total, divide by one plus the rate to obtain the taxable amount
• Obtain the tax as the difference between total and taxable amount
• Check that taxable amount plus tax gives back the total

The calcolo-iva calculator does exactly these steps for the four rates, in both directions. It applies the rate you choose. It does not decide whether a product qualifies for a reduced rate: that answer lives in Table A, and a tool that guessed it would give a false sense of safety.

The registers that carry the figures

The figures computed on invoices do not reach the settlement directly. They pass through the VAT registers. The Agenzia names two mandatory ones: the register of issued invoices and the purchase register. Their content is fixed, and it is the raw material of every periodic settlement.

• The progressive number of the invoice
• The date of issue
• The customer's details
• The taxable amount and the tax, split by the rate applied

Those four items are what the register of issued invoices records for each invoice. Other entries belong there too, for instance self-invoices for purchases from non-resident suppliers. The register may also take a single summary document for invoices issued in a calendar month whose individual amount is below 300 euros.

The purchase register records purchase invoices, customs bills and invoices for intra-Community purchases relating to the activity. The Agenzia makes the link explicit: entering the document in the purchase register is necessary to benefit from the deduction, which depends on the type of goods and services bought.

The two registers mirror each other. One gathers the tax the business owes because it sold; the other gathers the tax it may recover because it bought. Neither decides anything on its own: the settlement of the second module is nothing more than the difference between their totals for the period, adjusted for credits and small debts.

There are simplifications. Entrepreneurs keeping a journal and professionals keeping a chronological book may choose not to keep VAT registers if they record the same information elsewhere. Operators under simplified accounting who issue only invoices and use the data the Agenzia provides are also exempted from keeping them.

Retail is a separate case. Since 1 January 2020, those carrying on retail and similar activities who are not required to issue invoices, such as shopkeepers, craftsmen, hoteliers and restaurateurs, certify their daily takings by electronic storage and transmission to the Agenzia. They no longer keep the register of takings.

For these businesses the scorporo is not an occasional exercise but the daily routine. Their takings are VAT-inclusive by nature, and the tax due is extracted from them. A business that sells at several rates has to keep its takings split by rate, or it cannot extract the tax correctly.

The reserve of the consolidated VAT Act

Everything above is the law as practised in 2026, and it rests on Presidential Decree 633 of 1972. That decree is being replaced. The Gazzetta Ufficiale now serves the consolidated text of article 16 with a single line: the article is repealed by Legislative Decree no. 10 of 19 January 2026.

That decree is the consolidated VAT Act, the testo unico IVA. It reorganises the VAT rules into a new text. The date from which its provisions apply was not read for this course, and the Agenzia's page on rates, last updated on 12 December 2020, says nothing about it.

The honest reading is therefore narrow. The four rates and the method taught here are those that the Agenzia publishes for 2026. They are not a prediction of the content of the new text. When the testo unico applies, the rates and the references to Table A must be read again in it before being relied on.

Practically, keep the references loose in your own documents. Write the rate and the reason for it, not an article number copied from an old invoice template. A template that cites article 16 of the old decree will need to be corrected; a template that states the rate and the category will survive the change.