Reduction in the Italian threshold for tax-free shopping

Travellers domiciled or resident outside the European Union may now take goods for their own personal or family use with a value of EUR 70 or more (VAT included) outside the customs territory of the EU in their personal baggage without the need to pay VAT on them.

The conditions which must be satisfied remain unchanged:

The traveller must be a private subject who is domiciled or resident in a state outside the European Union;The goods purchased must be for the traveller’s personal or family use;The goods must be taken out of EU territory within three months of the date when the transaction took place; andThe transaction must be documented by an invoice (to be issued in a digital format by means of the OTELLO 2.0 system), which should be placed at the disposal of the buyer, who will be required to present it at the point of exit from the EU.

Prior to the 2024 reduction, the threshold applied by Italy was one of the highest in the European Union. While France also recently reduced its threshold to EUR 100, other member states, such as Portugal, Belgium, the Netherlands and Greece, have lower thresholds of EUR 50, and others, such as Spain, Germany and Ireland, have no threshold at all.

The reason for the reduction in the threshold is to create an incentive for tourism in Italy. According to government estimates, the total annual expenditure amount which may benefit from the VAT exemption will be in the region of EUR 210 million. 

The lowering of the threshold makes purchases in Italy more convenient, and has been looked upon with some concern by some neighbouring countries such as Switzerland which fears a loss of competitiveness in border trading.

Federico Piccolo is a chartered accountant and legal auditor. He is experienced in tax and corporate consulting for industrial and commercial enterprises, with specific expertise in VAT and international tax advising for foreign companies with subsidiaries and branches in Italy.