Italy’s new Consolidated VAT Act: what changes for invoicing and Bbusinesses from January 2027?

Italy’s new Consolidated VAT Act will apply from January 1, 2027, reorganizing existing VAT legislation without changing tax rates or obligations. Businesses must update legal references on invoices and e-invoices and review their ERP, accounting, and invoicing systems.

Italy is preparing to implement a new Consolidated Value Added Tax (VAT) Act, introduced by Legislative Decree No. 10 of January 19, 2026. The legislation brings existing VAT provisions together into a single framework, making the rules easier to understand and consult.

The decree was published in the Italian Official Gazette on January 30, 2026, and formally entered into force on January 31, 2026. However, its consolidated VAT provisions will apply from January 1, 2027, as established by Article 171.

https://www.normattiva.it/atto/caricaDettaglioAtto?atto.codiceRedazionale=26G00022&atto.dataPubblicazioneGazzetta=2026-01-30&utm_source.com 

The reform does not introduce new VAT rates, change the VAT treatment of transactions, or create new general VAT compliance obligations. Instead, it reorganizes and renumbers the existing legislation, requiring businesses to update the legal references used in their invoicing and accounting systems.

What does the new Consolidated VAT Act introduce?

The new legislation combines provisions previously regulated mainly through two important Italian VAT laws:

• Presidential Decree No. 633/1972, which establishes the general framework for Italian VAT.
• Law Decree No. 331/1993, which includes rules concerning intra-EU transactions.

These provisions are incorporated into a consolidated structure consisting of 171 articles organized into 18 headings, together with an appendix containing four lists.

The main objective is to simplify the organization of VAT legislation by bringing rules previously spread across different legal acts into a single framework.

The new Act also includes provisions repealing or replacing existing legislative provisions from January 1, 2027.

However, the consolidation is primarily technical and organizational. It is not intended to change how VAT is calculated or applied to business transactions.

Will VAT rates and tax obligations change?

One of the most important aspects of the reform is that the existing VAT treatment of transactions remains substantially unchanged.

Businesses will continue applying the same VAT rates and rules relevant to their activities, unless separate legislation introduces changes.

This means that the new Consolidated VAT Act does not, by itself, introduce new VAT rates or change the basic VAT treatment of domestic sales, imports, exports, or intra-EU transactions.

For retailers and other businesses, the main consequences are therefore related to documentation and software configuration rather than changes to everyday VAT calculations.

How will the new VAT Act affect invoices and electronic invoices?

One of the most important practical consequences concerns the legal references included on invoices. From January 1, 2027, businesses should use the updated legislative references introduced by the Consolidated VAT Act when invoices require a reference to a specific VAT provision.

For example, invoices containing references to provisions of Presidential Decree No. 633/1972 or Law Decree No. 331/1993 may need to cite the corresponding articles under the new legislation.

For electronic invoices, the changes primarily affect descriptive fields such as:

• Causale: Used to provide additional explanations or information about the invoice.
• Riferimento Normativo: Used to specify the legal provision supporting a particular VAT treatment, especially for transactions involving exemptions, non-taxability, or other special VAT classifications.

Importantly, the existing electronic invoicing VAT nature codes, including N1 and N2, will remain unchanged. Businesses will therefore not need to introduce new VAT nature codes solely because of this reform. However, they must ensure that any accompanying legal references correspond to the new legislation.

What changes are required for ERP, accounting, and POS systems?

Although the reform does not change VAT calculation rules, businesses may need to update several internal systems. ERP and accounting software frequently contain predefined VAT configurations that connect transaction types to specific legal provisions.

These references may be used automatically when generating invoices, preparing VAT records, or processing transactions that receive special VAT treatment.

As a result, businesses and software providers should review their existing VAT configurations and map the old statutory references to the corresponding articles of the new Consolidated VAT Act. For retailers, this is particularly relevant when POS systems are integrated with electronic invoicing platforms or accounting software.

For example, a retail POS system that generates invoices through Italy's Sistema di Interscambio (SdI) may need updates if it automatically inserts statutory references into invoice descriptions.

The reform does not introduce a new general POS fiscalization requirement or change the existing electronic receipt reporting framework. Its direct technical impact concerns legal references used in VAT documentation and connected software systems.

The new framework includes transitional protection for invoices that continue to cite the previous legislative provisions.

In or view, this reform is a useful step toward simplifying Italy's VAT legislation, particularly for businesses that regularly deal with different VAT treatments and legal references.

Although the reform does not change the actual VAT rules, it should not be overlooked. Even administrative changes can create technical challenges when businesses rely on automated invoicing and accounting systems.

For retailers and software providers, the main priority will be updating legal references without affecting existing VAT calculations or transaction processing. Early preparation and coordination between tax teams and software suppliers should make the transition easier and reduce the risk of invoicing errors.

Implementation Impact and What Businesses Should Do

The new Consolidated VAT Act will primarily affect legal references used in invoices, electronic invoicing solutions, accounting software, and VAT documentation. Businesses and software providers should prepare before January 1, 2027, by taking the following steps:

• Review existing legal references: Identify references to Presidential Decree No. 633/1972 and Law Decree No. 331/1993 used in invoicing and accounting systems.
• Map old and new provisions: Match existing VAT classifications and statutory references with the corresponding articles of the new Consolidated VAT Act.
• Update ERP and invoicing software: Ensure that invoice templates, automated descriptions, and relevant VAT records use the correct references.
• Check POS integrations: Verify that retail POS systems connected to e-invoicing or accounting solutions correctly transfer the updated information.
• Test electronic invoices: Confirm that relevant fields, including Causale and Riferimento Normativo, contain appropriate references while existing VAT rates and nature codes remain unchanged.
• Review transitional compliance: Assess the treatment of invoices containing old references and any potential consequences of delayed updates.

The main takeaway: Italy's new VAT Act does not change VAT rates or introduce new fiscalization requirements. However, businesses must prepare their invoicing, ERP, and accounting systems for the new statutory numbering from January 1, 2027. Early preparation will help ensure a smooth transition without disrupting existing VAT processes.

The source for this text is an article that was published by VatUpdate - Source

Nikolina Basić Senior Legal Consultant Linkedin profile