KGT Country Update | Italy | July 21, 2026
Between June 22 and July 6, 2026, the Italian Ministry of Economy and Finance — Department of Finance (MEF) held a public consultation on a draft legislative decree transposing Article 2 of Directive (EU) 2025/516, part of the EU’s VAT in the Digital Age (ViDA) package. The draft adjusts Italian VAT law with effect from January 1, 2027, focusing on the One-Stop-Shop (OSS) and Import One-Stop-Shop (IOSS) regimes and the move toward a Single VAT Registration in the EU.
Background
The ViDA package, adopted on March 11, 2025, amends the EU VAT Directive in three pillars: digital reporting requirements and e-invoicing, the platform economy, and Single VAT Registration.
Member states must transpose the successive stages on a fixed calendar, with the Single VAT Registration measures applying from July 1, 2028 and certain OSS/IOSS refinements from January 1, 2027. Italy, which already operates mandatory domestic e-invoicing through the Sistema di Interscambio (SdI), is now beginning the legislative work to align its VAT code with the ViDA amendments.
The Legislative Change
The draft legislative decree published for consultation on the Department of Finance website introduces the following main changes with effect from January 1, 2027:
- Expansion and clarification of the OSS and IOSS regimes, including updated registration information requirements and an extension of the non-Union OSS scheme to specific services supplied within the EU to non-EU customers.
- Clarification of practical aspects of OSS/IOSS operation: the exact timing of VAT liability under the OSS, VAT refund procedures, and the interaction between the IOSS and the special scheme for small enterprises.
- Revision of the EUR 10,000 EU-wide threshold for intra-EU distance sales and certain digital services; for businesses registered in the Union OSS, the option to tax in the customer’s member state will be treated as automatically exercised.
- Progressive phase-out of the call-off stock simplification: existing arrangements remain valid for goods dispatched up to June 30, 2028, and the underlying Italian provisions are scheduled for final repeal on June 30, 2029.
- Clarified conditions under which digital platforms and marketplaces qualify as deemed suppliers responsible for collecting VAT on designated intra-EU sales.
- From January 1, 2027 until June 30, 2028, inclusion in the OSS of certain cross-border supplies of electricity, gas, heating, and cooling to private consumers, with transitional rules for energy products treated as intra-EU distance sales.
Scope
The measures primarily affect cross-border B2C and intra-EU supply chains rather than domestic invoicing. E-commerce sellers, marketplaces and digital platforms, IOSS users importing low-value goods, businesses moving their own stock between EU member states (particularly those relying on call-off stock arrangements), and small enterprises using the SME scheme are all within scope.
Timeline
- June 22 – July 6, 2026 — public consultation window on the draft legislative decree.
- January 1, 2027 — intended entry into force of the OSS/IOSS and related amendments.
- June 30, 2028 — last dispatch date grandfathered under the existing call-off stock regime.
- June 30, 2029 — scheduled repeal of the Italian call-off stock provisions.
Businesses Affected
Multinationals with Italian operations should pay particular attention to the phase-out of call-off stock simplifications, which today prevent local VAT registrations for consignment-type stock transfers into Italy. Once repealed, businesses will need to rely on the new intra-EU transfer rules under ViDA’s Single VAT Registration pillar or restructure their logistics flows. Platforms and e-commerce sellers will need to reassess deemed supplier positions and OSS/IOSS registrations.
Required Actions
- Map current call-off stock and consignment flows into and out of Italy and model the post-2028 treatment.
- Review OSS/IOSS registrations, the automatic exercise of the taxation option under the revised EUR 10,000 threshold, and the timing of VAT liability in ERP tax determination logic.
- Platforms should reassess deemed supplier exposure for intra-EU sales under the clarified rules.
- Energy suppliers should evaluate the temporary OSS window for cross-border B2C supplies of electricity, gas, heating, and cooling.
Practical Implications
For SAP-based businesses, the changes affect tax determination, registration footprints, and reporting configuration rather than invoice formats: call-off stock logic, distance selling thresholds, and OSS settings will require review. Because the decree takes effect on January 1, 2027, impact assessments should be scheduled for the second half of 2026.
Expected Next Steps
The Department of Finance will evaluate the consultation feedback and finalize the decree through the ordinary legislative process ahead of the January 1, 2027 application date. Separate Italian legislation will be required in due course for ViDA’s digital reporting requirements pillar, where Italy has also opened a broader consultation on aligning SdI with the EU-level digital reporting framework.
How Can KGT Support You?
KGT helps multinationals prepare their SAP systems for ViDA-driven change. We assess the impact of the ViDA pillars on your registration footprint, tax determination, and reporting configuration in SAP ECC and S/4HANA, and we implement SAP Document and Reporting Compliance (DRC) for Italy’s SdI e-invoicing alongside our SAP-integrated e-invoicing add-ons. KGT can run a ViDA readiness assessment covering call-off stock flows, OSS/IOSS settings, and platform deemed supplier positions.
Official Sources
This publication is provided for general informational purposes only and does not constitute tax, legal, or professional advice. Please consult your advisor before acting on any information contained in this update.
