The starting point is the standard VAT rate of 22%, which applies, as a general rule, to all taxable transactions.
Reduced VAT rates apply only in exceptional cases expressly provided for by law for social, health policy or economic reasons. These rates are regulated by the Italian VAT Act (DPR 633/72, Table A) and are divided into 4%, 5% and 10%.
The differentiation of VAT rates is based on tax policy considerations: reduced rates apply to certain goods and services that are legally privileged – often due to their social or societal relevance – while the regular VAT rate applies in all other cases.
The current system has evolved over time and has been adjusted repeatedly to reflect changing economic and political objectives.